Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Inflation’

Where Will We Get the Cash?

Posted by hkarner - 12. Februar 2018

We already knew interest rates were rising. Recent data suggests they could rise significantly more than many expected just a few weeks ago. If so, that will be a big problem for bonds, stocks, and many other assets – not to mention taxpayers who will bear the cost of swelling government debt, consumers who may face inflation, and everybody who will be hurt by a recession.

The combination of a falling stock market and rising interest rates is historically and statistically rare. Normally, when the stock market goes through a correction, interest rates fall. Looking back through history, we see that 1987 and 1994, two years I have been writing about in connection with 2018, were the other unusual years.

I’ve been relatively optimistic on the economy this year, and I still think the year can end well. But given recent events, the path is more challenging now – and the odds of a rough 2019 are growing.

Burn Rate Den Rest des Beitrags lesen »

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ECB’s Draghi Warns of ‘New Headwinds’ From a Rising Euro

Posted by hkarner - 7. Februar 2018

Date: 06-02-2018
Source: The Wall Street Journal
European Central Bank chief also says the bank ‘cannot yet declare victory’ on the inflation front

European Central Bank President Mario Draghi warned Monday that the euro’s recent surge creates “new headwinds” for policy makers and should be closely watched.

The comments are the latest sign that a stronger euro—recently trading close to a three-year high of $1.25—could slow ECB efforts to unwind its giant monetary stimulus program.

Speaking at the European Parliament in Strasbourg, France, Mr. Draghi warned that the ECB “cannot yet declare victory” in its drive to push up inflation in the 19-nation eurozone.

“New headwinds have arisen from the recent volatility in the exchange rate, whose implications for the medium-term outlook for [inflation] require close monitoring,” Mr. Draghi told lawmakers.

The eurozone’s annual inflation rate fell to 1.3% in January as a result of weak energy-price growth, according to the European Union’s statistics agency. The ECB aims to keep inflation just below 2%. Den Rest des Beitrags lesen »

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The Global Economy Is Doing Great. Be Afraid.

Posted by hkarner - 28. Januar 2018

Date: 26-01-2018
Source: The Wall Street Journal

At Davos, financial chiefs are upbeat about the markets, and that is what has them worried

A topic of conversation at this week’s World Economic Forum in Davos, Switzerland, is how far equities could rise before falling back, and when it might happen. 

Cognitive dissonance is in the air. This year’s mental split allows finance chiefs to believe that everything’s bullish, the world economy is finally in synchronized growth mode and markets are quite rightly on fire—while worrying that it is all just too good to last.

“Everybody’s making money, and the clouds on the horizon don’t look very threatening,” said Stephen Schwarzman, chairman and chief executive of private equity group Blackstone . “That’s enough to create a positive environment.” Den Rest des Beitrags lesen »

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The Biggest Risk to the Eurozone’s Booming Economy: Inflation

Posted by hkarner - 5. Januar 2018

Date: 04-01-2018
Source: The Wall Street Journal By Simon Nixon

What did forecasters miss in 2017 and what might they be missing this time?

For the first time in a decade, economic forecasters appear to be unambiguously optimistic about the prospects for the eurozone economy. Perhaps that isn’t surprising given how badly wrong-footed they were by the strength of the recovery in 2017.

A year ago, the European Central Bank was forecasting growth of 1.7% while the consensus among independent forecasters was 1.3%. Yet the ECB now reckons that the eurozone grew in 2017 by 2.4%. Given that it was the fourth consecutive year of economic growth, ECB board member Benoît Coeuré insists this should no longer be called a recovery but an expansion. Some even call it a boom.

Certainly the latest data points to a very strong start to the New Year. Business and consumer confidence in the eurozone are at their highest levels since 2001, according to the European Commission’s economic sentiment indicator, while the latest surveys of purchasing managers show optimism among manufacturers at record levels and export orders at new highs. Den Rest des Beitrags lesen »

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US-Starökonom: „Die Deutschen brauchen keine Angst zu haben“

Posted by hkarner - 18. Oktober 2017

Interview András Szigetvari18. Oktober 2017, 07:00 derstandard.at

Trotz wachsender Wirtschaft müsse die EZB ihre ultralockere Geldpolitik fortsetzen, sagt Barry Eichengreen

STANDARD: Der Internationale Währungsfonds warnt vor einem Crash am Finanzmarkt. Investoren gehen zu viele Risiken ein, weil sich mit sicheren Investitionen keine Zinsen verdienen lassen. Zentralbanken haben zu dieser Entwicklung mit ihrer lockeren Geldpolitik beigetragen. Ein Fehler?

Eichengreen: Die Zentralbanken haben das getan, was sie tun mussten, um die Wirtschaft zu stabilisieren und die Inflation anzufachen. Wie bei jeder medizinischen Behandlung gibt es Nebenwirkungen. Aber nur deshalb, weil es auf den Finanzmärkten zu Ausschweifungen kommt, dürfen Notenbanken ihre Kernaufgabe nicht aus den Augen verlieren, und diese lautet nun einmal für Preisstabilität zu sorgen. Den Rest des Beitrags lesen »

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BIS Says Globalization Is Answer to Inflation Puzzle

Posted by hkarner - 24. September 2017

Date: 23-09-2017
Source: The Wall Street Journal

Bank’s chief economist says research has implications for central-bank policy

The Yangshan deep-water port in Shanghai, China. Globalization is the most likely explanation for surprisingly low rates of inflation, suggesting that central banks should be patient in seeking to meet their targets and avoid providing too much stimulus, according to the BIS.

Globalization is the most likely explanation for surprisingly low rates of inflation, suggesting that central banks should be patient in seeking to meet their targets and avoid providing too much stimulus, a senior official at the Bank for International Settlements said Friday. Den Rest des Beitrags lesen »

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The Mystery of the Missing Inflation

Posted by hkarner - 14. September 2017

Nouriel Roubini

Nouriel Roubini, a professor at NYU’s Stern School of Business and CEO of Roubini Macro Associates, was Senior Economist for International Affairs in the White House’s Council of Economic Advisers during the Clinton Administration. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank.

Since the summer of 2016, the global economy has been in a period of moderate expansion, yet inflation has yet to pick up in the advanced economies. The question that inflation-targeting central banks must confront is straightforward: why?

NEW YORK – Since the summer of 2016, the global economy has been in a period of moderate expansion, with the growth rate accelerating gradually. What has not picked up, at least in the advanced economies, is inflation. The question is why.

In the United States, Europe, Japan, and other developed economies, the recent growth acceleration has been driven by an increase in aggregate demand, a result of continued expansionary monetary and fiscal policies, as well as higher business and consumer confidence. That confidence has been driven by a decline in financial and economic risk, together with the containment of geopolitical risks, which, as a result, have so far had little impact on economies and markets. Den Rest des Beitrags lesen »

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Central Bankers’ Shifting Goalposts

Posted by hkarner - 7. September 2017

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The Market’s Big Puzzle: What Is Happening to Growth and Inflation?

Posted by hkarner - 7. September 2017

Date: 06-09-2017
Source: The Wall Street Journal

Globalization, the decline of labor unions and the rise of big multinationals may be changing the way the economy works

Chicago Fed President Charles Evans referred to Amazon’s purchase of Whole Foods Market as an example of ‘disruptive technology’ that keeps inflation down.

The world’s major nations are reporting stronger economic growth. Yet what was once thought to be growth’s constant companion is puzzlingly missing: inflation.

The U.S. economy grew at an annualized 3% in the second quarter, but in July consumer-price inflation was up only 1.7% from the prior year. Den Rest des Beitrags lesen »

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Global Inflation Hits Lowest Level Since 2009

Posted by hkarner - 4. August 2017

Date: 03-08-2017
Source: The Wall Street Journal

Data complicates plan to remove post-crisis stimulus policies

ECB President Mario Draghi  said the central bank would decide in the fall on the future of its bond-buying program.

Inflation in the Group of 20 largest economies, which account for most of the world’s economic activity, fell to its lowest level in almost eight years during June, deepening a puzzle that confronts central banks as they contemplate the removal of post-crisis stimulus policies.

The Organization for Economic Cooperation and Development Thursday said consumer prices across the G-20 were 2% higher than a year earlier. The last time inflation was lower was in October 2009, when it stood at 1.7% as the global economy was starting to emerge from the sharp downturn that followed the global financial crisis.

The contrast between then and now highlights the mystery facing central bankers in developed economies as they attempt to raise inflation to their targets, which they have persistently undershot over recent years. Den Rest des Beitrags lesen »

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