The Biggest Pusher of Easy Money, Former Federal Reserve Chairman Bernanke Warns on Stagflation in New Book

What do you do you do when you are the man that espoused easy money through Quantitative Easing, took it to new levels and the bloated world you created implodes? You write a book about it of course. That’s exactly what former Federal Reserve Chairman Ben Bernanke has done and of course he warns in his new book that the United States could face simultaneous sky-high unemployment and inflation on levels not seen since the 1970s. Any mention of his … Continue reading “The Biggest Pusher of Easy Money, Former Federal Reserve Chairman Bernanke Warns on Stagflation in New Book”

Banco de México Raises Rates Again with Inflation Risk to Mexican Economy

The Mexican Central Bank, Banco de México raised interest rates by 50 basis points to 7.00% with the bank saying headline and core inflation forecasts were revised upwards. One dissenter voted to hike by 75 bps. The Mexico central bank Governing Board increased the target for the overnight interbank interest rate by 50 basis points to 7.00%. The vote was not unanimous. Voting in favor of the decision were Victoria Rodríguez, Galia Borja, Gerardo Esquivel, and Jonathan Heath. Voting in … Continue reading “Banco de México Raises Rates Again with Inflation Risk to Mexican Economy”

US Producer Price Inflation Rose 0.5% m/m and 11.0% y/y in April

US Producer price inflation continues elevated at a rapid pace, a long way from the Central Bank transitory mantra. Annual PPI came in at 11.0% (vs. 11.5% in March) core producer prices were up 8.8% (vs. +9.2% in March). March was the largest increase since data were first calculated in December 2009. Month-over-month the rise was 0.5% in April (consensus +0.5%), and core producer prices rose 0.4% m/m (consensus +0.6%).  April 2022 PPI The Producer Price Index for final demand … Continue reading “US Producer Price Inflation Rose 0.5% m/m and 11.0% y/y in April”

U.S. Inflation Higher Than Expected in April CPI +8.3% y/y vs 8.1% y/y

US CPI in April rose +0.3% m/m (consensus 0.2%). Core CPI rose 0.6% (consensus +0.4%). The bond and stock markets have been selling off on inflation fears. 10-year yields rising over 3%. On a year-over-year basis, total CPI is up 8.3% (versus 8.1% expected) and core CPI is up 6.2% (versus 6.0% Expected). The surge in energy and grains costs due to war in Ukraine has inflamed price pressures. The Fed began moving aggressively last month. April marked the eighth time … Continue reading “U.S. Inflation Higher Than Expected in April CPI +8.3% y/y vs 8.1% y/y”

RBA Raises Rates From Record Low 0.10% by 25 bps to 0.35%

The Reserve Bank of Australia raised interest rates off an all-time low on Tuesday to 0.35% higher than the widely expected 15 bps after the April monthly statement no longer featured the phrase “the board is prepared to be patient”. This indicated the rate cycle has accelerated. This is the first-rate hike by the RBA since 2010. The Australian dollar popped 0.7090 to 0.7140 on the decision, while the ASX 200 dropped on the announcement. RBA patience coming to an … Continue reading “RBA Raises Rates From Record Low 0.10% by 25 bps to 0.35%”

Reserve Bank of New Zealand Raised Rates 50 Basis Points to Help Reduce Risks of Rising Inflation Expectations.

The Reserve Bank of New Zealand raised its Official Cash Rate by 50 bps to 1.00%, as expected. The RBNZ also left the door open to another similar large increase at its next meeting in May. central bank will not reinvest QE proceeds and bond holdings will begin decreasing by NZD5 billion per year in July. The Reserve Bank of New Zealand raised the cash rate to 1.5% from 1.0%. The follows quarter-percentage-point increases at each of its October, November … Continue reading “Reserve Bank of New Zealand Raised Rates 50 Basis Points to Help Reduce Risks of Rising Inflation Expectations.”

Inflation Surge Higher Continues in March US CPI +8.5% y/y largest Increase in Forty Years

US CPI in March rose 1.2% m/m (consensus 1.2%). Core CPI rose 0.5% (consensus +0.5%). The bond market sold off ahead, 10-year yields rising seven consecutive days prior to the release. On a year-over-year basis, total CPI is up 8.5% (versus 7.9% in February) and core CPI is up 6.5% (versus 6.4% February). The surge in energy and grains costs due to war in Ukraine has inflamed price pressures. The Fed began moving aggressively last month. March marked the eighth … Continue reading “Inflation Surge Higher Continues in March US CPI +8.5% y/y largest Increase in Forty Years”

RBA Patience Running Out with Inflation, Keeps Rates at Record Low 0.10% Ahead of Election

The Reserve Bank of Australia held interest rates at an all-time low on Tuesday to just 0.1% as widely expected. However, a rate rise may become sooner rather than later, the April monthly statement no longer features the phrase “the board is prepared to be patient”, which many see as an indicator the rate cycle has accelerated. The Australian dollar popped above 76 US cents, while the ASX 200 dropped sharply on the announcement. RBA patience coming to an end … Continue reading “RBA Patience Running Out with Inflation, Keeps Rates at Record Low 0.10% Ahead of Election”

Uncertainty About the Economic Outlook Remains Extraordinarily High says NY Fed Williams

The New York Fed president John Williams, who is a voting member was speaking to a symposium at Princeton University continued with his hawkish tilt. He said the process of reducing the size of the Federal Reserve’s balance sheet could start at the next meeting, May 3 & 4. He also focused on familiar themes saying and risks to the inflation outlook are particularly acute. The Fed holds around US$9 trillion of Treasury bonds and mortgage-backed securities. “These actions should enable us … Continue reading “Uncertainty About the Economic Outlook Remains Extraordinarily High says NY Fed Williams”

Inflation Surging Higher in February US CPI +7.9% y/y largest Increase in Forty Years

US CPI in February rose 0.8% m/m (consensus +0.8%). Core CPI rose 0.5% (consensus +0.5%). On a year-over-year basis, total CPI is up 7.9% (versus 7.5% in January) and core CPI is up 6.4% (versus 6.0% January). Inflation remains persistently high as Central Bankers keep trying to reassure us that soaring inflation will come under control. The surge in energy costs due to war in Ukraine is still to come. Pressure is on the Fed to begin moving aggressively when … Continue reading “Inflation Surging Higher in February US CPI +7.9% y/y largest Increase in Forty Years”