Tag Archives: inflation

There seems to be an intense if at times acrimonious debate raging inside the Federal Reserve right now. The differences go down to its very core philosophies. Just over a week ago, Vice Chairman Stanley Fischer abruptly resigned from the Board of Governors even though many believed he was a possible candidate to replace Chairman Yellen at the end of her term next year. His letter of resignation only cited “personal...

Trotz Wirtschaftsaufschwung keine Zinserhöhung: Bank für Internationalen Zahlungsausgleich in Basel. (Foto: Keystone/Martin Ruetschi) Vor einem Jahr waren die Erwartungen klar: 2017 werden die Zinsen auf breiter Front steigen. Die neuste Publikation der Bank für Internationalen Zahlungsausgleich (BIZ) stellt klar, dass diese Erwartungen falsch waren (Quelle). Der Grund für den Irrtum ist, dass der Inflationsdruck trotz Wirtschaftsaufschwung kaum zugenommen hat. Die BIZ stellt fest, dass...

This week attention will fall on US FOMC rate decision, BoJ policy rate announcement, German and NZ elections. Economic data releases include PMI in the Euro area, retail sales in the UK and existing home sales in US. In Emerging Markets, there are monetary policy meetings in South Africa, Indonesia, Hungary, Taiwan and Philippines. BofA highlights the week's key global events: Central bank meetings: US FOMC and BoJ The Fed will make policy announcement on Wednesday. Balance sheet...

In its first run, the Federal Reserve was actually two distinct parts. There were the twelve bank branches scattered throughout the country, each headed by almost always a banker of local character. Often opposed to them was the Board in DC. In those early days the policy establishment in Washington had little active role. Monetary policy was itself a product of the branches, the Discount Rate, for example, often being...

During the middle 2000’s, one more curious economic extreme presented itself in an otherwise ocean of extremes. Though economists were still thinking about the Great “Moderation”, the trend for the Personal Savings Rate was anything but moderate, indicated a distinct lack of modesty on the part of consumers. In early 2006, the Bureau of Economic Analysis calculated that the rate had been negative for all of 2005. It...

One day after reporting a slightly better number for Q2 GDP, the BEA reports today that there is little reason to suspect it was anything more or lasting. The data for Personal Income and Spending shows that the dominant condition since 2012 remains in effect – “good” quarters, or whatever passes for one these days, are the anomaly. There still is no meaningful rebound in income. Real Personal Income excluding...

Die Europäische Zentralbank ist sich uneins bezüglich Ausstieg aus der expansiven Geldpolitik. (Foto: Getty Images) Der Wechselkurs des Euros sei nicht Gegenstand ihrer Geldpolitik, betonen die Entscheidungsträger der Europäischen Zentralbank (EZB) stets. Aber das ist nur formal richtig. Auf dem Papier ist die Zentralbank der 19 Staaten, die den Euro als Währung adoptiert haben, allein dem Ziel verpflichtet, eine geringe Inflation zu garantieren. Das sei die beste Voraussetzung für...

Summary Home ownership varies throughout the EU but is overall near US levels. Germany has the lowest home ownership, and Spain has the most.  Italy has the least amount of mortgages. US include owner equivalent rents in CPI, the EU does not. This Great Graphic was in the Financial Times recently. It shows home ownership rates several EU countries.  The useful chart also shows those who own (red bar) and those...

In October 2015, Federal Reserve Vice Chairman Bill Dudley admitted that the US economy might be slowing. In the typically understated fashion befitting the usual clownshow, he merely was acknowledging what was by then pretty obvious to anyone outside the economics profession. Dudley was at that moment, however, undaunted. His eye was cast toward the unemployment rate and that was nothing but encouraging no matter the...

Of the economic releases of the past two weeks the one that got the most attention was the employment report. That report is seen by many market analysts as one of the most important and of course the Fed puts a lot of emphasis on it so the press spends an inordinate amount of time dissecting it. I don’t waste much time on it myself because it is subject to large revisions and has little predictive capability. In...