Top Stories

inflation

Jay Powell

In the World, World economy 23rd August 2020

Inflation Is The Key

Chris Iggo (AXA Investment Managers) | Next month the Fed is expected to announce some changes to its long-term monetary policy framework. Many observers expect that to include an “average inflation target” which in theory means the Fed will allow inflation to rise above 2% for a long enough period to compensate for when inflation has been below 2%. It likely will need to back this up with forward guidance suggesting that rates won’t be increased until it is convinced its inflation target (and maybe an unemployment target) has been met. 

ipc

European economy 22nd August 2020

Euro Area Economic Watch Inflation update: it’s bad already, but it will probably get worse

Rubén Segura-Cayuela (BoAML) | We still expect a top-up of the Pandemic Emergency Purchase Programme (PEPP) by another EUR500bn to stretch until end-2021- probably announced in December. That will be necessary to accommodate the economy. But it will not suffice to tackle long-term inflation dynamics and faltering expectations. More and longer policy support is needed, urgently. 

inflation board

World economy 7th July 2020

The Other Looming V-Shaped Recovery

DWS | There are a few reasons to think that unlike the economy, inflation could see a V-shaped recovery. Recently published inflation data seem to confirm this theoretical view. Without taking into account the energy component, which, thanks to the oil price, fluctuated wildly in 2020, the inflation rate in the Eurozone was 1.3% in June. That is exactly the same level as at the beginning of the year.

Leverage loans. The next trigger?

World economy 26th May 2020

Inflation Is Impossible: The Speed Of Money Circulation Is At An All-Time Low

Miguel Navascués | The Fed is continuing to buy assets and issue money to chosen subjects (for the first time not just the banks). The purchases made so far are more than double those made in 2008. However, the speed of money circulation (i.e., GDP/M2), shows a decline to levels never seen before: each unit of money in circulation moves just $1.4 of GDP. Or, in other words, more and more money is needed to move the same amount of GDP.

inflation course

World economy 9th May 2020

Be Aware Of What Inflation Really Is

Degussa | Most people these days think inflation is a rise in consumer goods prices of more than 2 per cent per year – a result of what mainstream economics has been teaching generations of students all around the world. However, equating inflation with changes in consumer goods prices is inadequate and highly deceptive for various reasons. 

IPC inflation spain

Spanish economy 17th April 2020

Spain’s Year-on-Year Rate Of Inflation Falls To 0% Due To Energy Product

The yearly rate of inflation dropped by seven-tenths of a percentage point in March to 0%, after a monthly decline of 0.4%. The result was very close to expectations, and was mainly thanks to the fall in energy products due to the oil price collapse. The main deviation occurred in unprocessed foods’ prices which were inflated due to the increase in fresh fish, vegetables and pulses.

Fiat Money

World economy 29th February 2020

Fiat Money Will Most Likely Continue To Lose Its Purchasing Power Over Time

Degussa | Wherever you look: Prices for consumer goods, real estate, stocks and bonds are on the rise. That means that the purchasing power of money is on the decline. For if, say, stock prices go up, your money unit can buy fewer stocks. What it also means is: While people holding assets, whose prices increase, become “richer”, people holding money get “poorer”

Spain inflation

European economy 28th February 2020

M3 growth in the Eurozone is still higher than the level compatible with 2% inflation

J.L. M.Campuzano (Spanish Banking Association) | The European Central Bank (ECB) published on Thursday the statistics for monetary aggregates in January. In January specifically, the growth rate accelerated to 5.2% per year. This increase in the M3 money supply continues to exceed the theoretical level compatible with medium and long-term inflation of 2%. The main contribution was from credit to the private sector, with an increase of 3.4% over last year.