While we are observing some indicators that imply modest wage growth, at this point it is more noise than signal and does not imply an imminent breakout in wage push inflation that would end the three-decade period of quiescence in pricing. … READ MORE >
inflation
CHART OF THE DAY: A do-over year for the Consumer Price Index
The inflation numbers for April released on Wednesday show the Consumer Price Index rising by 4.2% compared to April 2020, higher than the Bloomberg consensus forecast of 3.6%. … READ MORE >
Fed policy decision: Steady as U.S. economy at inflection point
The Federal Reserve made no substantial changes on Wednesday to the path of interest rates, its monthly $120 billion in asset purchases, overnight interest rates or interest paid on excess reserves. … READ MORE >
Inflation expectations: Have they reached a peak?
The recent decline in yield most likely represents a rethinking by market participants and investors on the risk of rising inflation to the economic outlook. … READ MORE >
CHART OF THE DAY: Deflating the hype on inflation
While we do expect the year-ago effects brought on by the global pandemic to result in a period of moderate reflation in the economy, the longer-term outlook implies that elevated inflation will be transitory and give way to price stability. … READ MORE >
CHART OF THE DAY: Where in the world is wage push inflation?
Much of the talk about risks to the economic outlook has been linked to the prospect of higher inflation following more than $5 trillion in federal spending to address the pandemic. But what is often missing in that discussion is the link between price volatility and wages. … READ MORE >
Making sense of inflation: What we can learn from post-recession recoveries
It can take an average of 27 months after a recession for inflation to return to normal as sustained economic growth is attained and inflation reaches its assumed 2% target. This implies that some of the recent concerns around inflation are premature. … READ MORE >
U.S. February Consumer Price Index: Inflation to rise from a low base
In February, the top-line CPI index increased by 0.4% month over month and by 1.7% year over year. Core CPI excluding food and energy inched forward by 0.1% on the month and rose 1.3% on a year-ago basis. … READ MORE >
CHART OF THE DAY: Amid talk about inflation, expectations have remained in check
Despite all the talk about rising inflation, there’s not much difference in inflation expectations between last year and this year, or last month and this month, according to an economic model. … READ MORE >
Flattening Phillips curve implies greater space to address economic needs
During the past few decades, as the economy has shifted from one based on manufacturing to one based on information and digital technologies, this traditionally inverse relationship between unemployment and inflation as shown in the Phillips curve has flattened. … READ MORE >