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Central Bank Tightening This Week Has Fueled Worries Over Global Oil DemandJun 17, 2022 - 08:22:23 PDT
Oil prices poised to break a string of weekly gains as demand worries linger...
The U.S. dollar rose in early European trade Friday, posting strong gains against the Japanese yen after the Bank of Japan maintained its ultra-easy monetary policy in contrast to the aggressive tightening of its peers.
The Bank of Japan would face a huge loss on its super-sized holdings of government bonds if it were to buckle under ever greater market pressure and abandon its easy monetary policy as hedge funds rush to short the debt securities.
Euro zone inflation rose to a record high 8.1% last month in line with a preliminary estimate, more than four times the European Central Bank's target and underscoring its plans to raise interest rates next month to tame runaway price growth.
On May 4, Jerome Powell dismissed the possibility of the Federal Reserve hiking the federal funds rate by three-quarters of a percent. On June 15, he announced that America’s central bank was doing just that, a reminder that the Fed continues to give itself more power over the economy, even as it repeatedly demonstrates an inability to predict inflation, economic growth...
Fears of a growing totalitarian tendency in the US have swelled during 2020–22. But how close are we really to a totalitarian state? How have such regimes come about historically and what are the warning signs?
Davos is in serious trouble as the Fed aggressively moves to bankrupt the ECB. I laid it out in talks leading up to the FOMC.
Jun 17, 2022 - 08:06:45 PDT
When the Fed’s dual mandate includes price stability, you would think that a firm understanding of inflation would be one of the only prerequisites to become Fed chair.
We believe a sustained dollar bear market in the next 6 to 12 months would be a strong tailwind for emerging market debt assets, particularly if non-US growth momentum recovers from today’s distressed levels.
Argentina’s central bank lifted its benchmark interest rate Thursday for the sixth time this year to 52% as the government struggles to cool inflation expectations.
Why China’s Inflation Rate Is Low Compared to the US, Europe and BritainJun 17, 2022 - 06:11:03 PDT
Chinese officials and academics have attributed the divergence to Western stimulus measures, notably the unprecedented money printing used to save economies battered by the coronavirus pandemic. The US Federal Reserve's balance sheet has more than doubled in the past two years to US$8.9 trillion, while Beijing, which was cautious about an all-out stimulus, has refrained from excessive loosening.
Euro Crisis Could Return: Top European Economist Sounds Alarm After ECB Panic MeetingJun 17, 2022 - 06:03:07 PDT
Christine Lagarde, ECB President, earlier sounded the alarm that the European economic community could be heading back to dark economic days, with the bank warning of “resurgent fragmentation risks” in a statement. Following the emergency meeting on Wednesday, the ECB pledged fresh measures to limit sell-offs in the bond market.
The Japanese yen fell 2% on Friday after the Bank of Japan bucked a wave of tightening and stuck with its ultra-accommodative stance, adding to soaring volatility in currency markets hit by a series of rate hikes this week. The Swiss National Bank's surprise decision to raise rates by 0.5% continued to reverberate through markets, with the euro losing half a percent...
The world’s central bankers are unleashing what may prove to be the most aggressive tightening of monetary policy since the 1980s, risking recessions and roiling financial markets as they rush to tackle the surge in inflation they didn’t see coming.
Record Inflation: 36% of Employees Earning $100,000 or More Say They Are Living Paycheck to PaycheckJun 17, 2022 - 05:48:24 PDT
The share of workers earning at least $100,000 a year who report being cash-strapped is double what it was three years ago.
Inflation Is Expected To Remain High Later This Year Even As the Economy Slows and Layoffs Rise: NYTJun 17, 2022 - 05:46:14 PDT
Millions of Americans are feeling similarly stuck as their savings run low and their cost of living runs high. Now, the economy appears poised to slow — potentially sharply — in ways that could limit wage growth and cause job losses even as prices remain elevated.
In nearly all of the 44 advanced economies we analyzed, consumer prices have risen substantially since pre-pandemic times.
Now that interest rates are rising with much further to go, the global banking system faces a crisis on a scale like no other in history.
Coordinated or not ahead of this month's G7 summit, global central banks are accelerating interest rate hikes but also actively draining the giant pool of cash swilling around world markets and buoying currencies to stymie imported inflation. The worrying bit for investors is that it may only be about half-way through and the aggressive tightening unveiled this week shows little...
Already, very early signs of slowing demand and inflation are cropping up. If the economy averts all-out disaster, then stabilizing or declining rates would spur a market rebound.