Deeper Analysis

Central Bank Thinking in Addressing the Spike in Inflation

December 17, 2021

The following excerpts from the Bank of Russia governor explaining today’s sharp interest rate hike epitomized the dilemma of many central bankers around the world coming to terms with an inflation spike caused by mostly supply bottlenecks that has lasted longer than anticipated. Our special focus is to ensure that the monetary policy is well-balanced. […] More

November 2021 in Figures

November 30, 2021

The Omicron revelation last week dwarfed all other developments that had occurred earlier in November. Equity prices and ten-year sovereign debt yields fell sharply in response. The dollar experienced strong gains during November. The price of West Texas Intermediate oil, whose prior rise has been a leading factor in the global intensification of inflation this […] More

Japan Bucking the 2021 Trend to Higher Inflation Around the World

November 19, 2021

The sharper-than-forecast rise of inflation almost everywhere and recent further intensification of price pressures in many places has been a big mystery and source of great dispute over the trend’s future evolution. A centrally dynamic role of oil and food prices, as was the case in the 1970s, is magnifying inflationary fears, but there are […] More

Two Characteristics of U.S. Inflation Spikes When Caused by Supply Bottlenecks

November 15, 2021

The former economics Nobel prize-winner and current New York Times OP-Ed columnist Paul Krugman wrote a piece last week asserting that elevated inflation this year more closely resembles patterns in 1947 than in 1979. It’s an interesting take, original at first glance yet obvious when one reflects on the the root cause of what’s driving […] More

Extraordinary Acceleration of U.S. CPI Inflation

November 10, 2021

The 6.2% consumer price inflation rate in October was its fastest pace since November 1990. Even more startling the 5.0 percentage point advance since 1.2% in November 2020 was the greatest 11-month acceleration of CPI inflation since such shot up from 5.7% in July 1973 to 10.9% by June 1974. Energy prices played a central […] More

Bigger-Than-Expected Central Bank Policy Rate Hike in Poland

November 3, 2021

A 75-basis point increase in Poland’s central bank reference rate followed a 40-basis point hike at the prior October meeting and, at 1.25%, will lift the rate level to within 25 basis points of its pre-pandemic 1.5% level. According to a released statement from the Monetary Policy Council, The rise in global prices of both […] More

October 2021 in Figures

November 1, 2021

Equities rebounded in October. The dollar was mixed and down marginally on balance. The price of gold rose only slightly, but that of oil appreciated over 10%, aggravating the elevation of general inflation. Long-term interest rate climbed as investors anticipate that central bankers will begin to raise policy rates sooner than forward guidance suggests. 10-Yr […] More

Tuesday Rundown of U.S. Data Results

October 26, 2021

U.S. house price inflation remain high in August but not quite so torrid as in July. Compared to the prior month, the HPI rose 1.2% according to the Case-Shiller index of 20 metropolitan areas and 1.0% according the the FHFA index. The 12-month increase from the Case-Shiller survey was a 2-month low of 19.7%, down […] More

September 2021 and Third Quarter in Figures

September 30, 2021

The summer quarter of 2021 was a volatile one, as it became increasingly apparent to central bankers, economists and investors alike that because of relentless and deepening supply bottlenecks inflation was rising faster and likely to remain very elevated for considerably longer than had been assumed in the first half of the year. Meanwhile, uncertainties […] More

FOMC Statement, Forecasts, and Press Conference

September 22, 2021

Reassured investors reacted bullishly in an initial way. Stocks, which already were higher on the day, rose further. Long-term Treasury yields slid a bit, and so did the dollar. The FOMC statement┬áconfirmed “that a moderation in the pace of asset purchases may son be warranted,” which investors believe implies sometime in the coming quarter. But […] More