Deeper Analysis

July 2022 in Figures

July 30, 2022

July was another active month for central banks in the face of high inflation, and investors almost assuredly moved wealth back into riskier assets to a greater extent than monetary officials would like to have seen. June ended just two weeks after the Federal Reserve’s greater-than-predicted initial 75-basis point interest rate hike, and by end-July […] More

U.S. GDP Data Deconstructed

July 28, 2022

As some had speculated, the first estimate of U.S. GDP in the second quarter posted a second consecutive quarter-on-quarter decline, this time of 0.9% after a 1.6% slide in the first quarter. If this had been accompanied by falling employment, which emphatically has not been the case, it would be a strong signal that the […] More

Front-Page Graph of U.S. CPI Inflation in Today’s NYT Illustrates Big Difference in Current Spike from the 1970s Experience

July 14, 2022

It’s a difference noted before in this blog. The inflation that former Fed Chairman Volcker eventually slew was felt in three, each larger than the previous one and altogether encompassing fifteen years. The first wave from CPI inflation of a half-percent to a peak around 6% played out over five years. Inflation then receded back […] More

Second Quarter 2022 in Figures

June 30, 2022

Financial markets experienced a large shakeout during the second quarter of 2022. Central bankers around the world have concluded that the spike of inflation is not going to dissipate without monetary policies transforming to a restrictive stance, and even if that happens the environment is so greatly changed by the pandemic, Russian war, and legacy […] More

Remember the Misery Index

June 22, 2022

The misery index, a fabricated summary economic statistic that gained fame during the late 1970s and early 1980s but pre-existed that era, simply adds the U.S. 12-month rate of CPI inflation to the unemployment rate for any given month. The misery index peaked at 22.0 in June 1980 and registered a record low of 3.0 […] More

Comparing the Central Bank Interest Rate Paths of the United States, Brazil, U.K., Iceland,Poland and Czech Republic

May 5, 2022

All six of the central banks in this comparative study had interest rate hikes announced either today or yesterday. In none of the cases was the increase the first one of the current cycles. All these tightening cycles represent responses to accelerating inflation caused in large part by external factors like the pandemic, policy responses […] More

April 2022 in Figures

April 29, 2022

The medium-term outlook for the U.S. economy soured progressively during the past month. The Federal Reserve signaled that it had no choice but to embark on an aggressive tightening of its policy, and investors worried that containing inflation from its current multi-decade high could not be possible unless the economy endures a period of recession. […] More

First Quarter and March 2022 in Figures

April 1, 2022

March 2022 saw pandemic distortions to growth and inflation subside, only to be superseded by risks from the war in Ukraine. Commodity prices got an upward jolt, forcing central banks to prioritize the containment of inflation above a stance that had supported recovery from the pandemic. The Bank of England, Bank of Canada and Federal […] More

Inflation Has Spiked, But Nobody Is to Blame

March 7, 2022

When something goes wrong economically, it’s natural to find fault in political leadership, and oftentimes mistaken policies are culpable. The Covid pandemic presented challenges not seen in a century, and there were no accurate, comprehensive, and reliably useful data to predict either the evolution of the pandemic or exactly how economies would respond to public […] More

February 2022 in Figures

February 28, 2022

Investors were already on high alert as the month began as a re-intensification of inflationary pressures made the prospect of tighter monetary policies seem more inevitable and likely to proceed more aggressively than imagined at the start of this year. On top of that set of risks, Russia’s invasion of Ukraine played out in surreal […] More