Tag Archives: inflation

UK inflation=US Future?

By Admin | Published: May 11, 2011

Today, the Bank of England released their quarterly inflation report and Bank of England governor Mervyn King said that inflation remains “uncomfortably high.” This indicates that the UK central bank will begin to raise interest rates by the end of the year from very low levels of 0.5%. They also have strong upward pressure on wages as permanent salaries are at a 9 month high in April.

Labor costs are normally the biggest drivers of inflation in an industrialized economy and the BOE appears to be seriously behind the curve on this front. The policy problem for the central bank … …READ MORE

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Top Themes and Trades for FX

By Admin | Published: February 25, 2011

1. Like the winner of most American Idols, this week’s downward revision to US GDP was both surprising and disappointing. The market was expecting an increase from 3.2% to 3.3% and it was revised down to 2.8%. For the year, it was only 2.8% as the economy struggles to produce a rate fast enough to create jobs and then become self-sustaining. The jobs picture will be on full display next week as we get ISM data, ADP data, weekly jobless claims, NFP and unemployment. The GDP data this week should lead some economists and strategists to revise down their expectations … …READ MORE

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3 Things you need to know now

By Admin | Published: January 24, 2011

1. State of the union or SOTU. Most of the content has been leaked already in the NYT and Washington Post so it won’t be new news by the time the President speaks tomorrow night. However, the President is likely to push for new spending on infrastructure, education and technology. The Republicans are going to oppose any new spending and the House Budget committee meets today to lay out their framework for limiting federal government growth. One of the rumors that keep surfacing is a new push from Obama for a Homeland Reinvestment Act II.

Allegedly, this new act would … …READ MORE

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3things You Need to Know Today

By Admin | Published: January 18, 2011

1. China’s President Hu Jintao visits the United States. This is an official state visit and there will be an official state dinner as President Hu comes to Washington D.C. and then travels to Chicago. Yesterday, he answered submitted written questions from both the WSJ and WaPo. WSJ question 4: What do you think will be the U.S. dollar’s future role in the world? How do you see the issue of making the RMB an international currency? Some think that RMB appreciation may curb China’s inflation, what’s your view on that?

Here are the salient bullets on the currency:
• … …READ MORE

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The Path to Inflation is Paved with Good Intentions

By Admin | Published: October 6, 2010

In a fascinating WSJ interview, Charles Evans, president of the Federal Reserve of Chicago, provided further support for a massive, unprecedented resumption of quantitative easing by the U.S. Federal Reserve.

“In the last several months I’ve stared at our unemployment forecast and come to the conclusion that it’s just not coming down nearly as quickly as it should…This is a far grimmer forecast than we ought to have…..As result, he said, he favors “much more [monetary] accommodation than we’ve put in place.”

He goes on to suggest that the Fed should push rates down to get inflation higher and to … …READ MORE

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Inflation: What If The Unthinkable Happens?

By Admin | Published: January 19, 2010

Currently, there are two places in the world that are experiencing significant increases in prices and more may be coming. India’s Federal Chief Statistician Pronab Sen told a private television channel on Tuesday that the monthly inflation may touch double digits by March according to the Times of India. “It is really possible,” he said. India’s wholesale price index rose to 7.31% in December from a year earlier, driven by higher food prices. Processed food items rose 26.40% in December and non-processed food items increased by 19.17%. The Reserve Bank of India had only projected a 6.5% overall inflation rate … …READ MORE

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China's Inflation and Currency Problem

By Admin | Published: December 28, 2009

December 28th, 2009
Chicago, Illinois

Andrew B. Busch
Global Currency and Public Policy Strategist
(312) 845-2879
1-800-438-0434

Next Speech

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With Chinese Premier saying no to yuan appreciation and US holiday retail sales better than expected, the greenback is marginally lower against most major currencies in thin trading. The US dollar index is down .12 at 77.60. Australia, UK, Germany, and Canada (and others) are out for Boxing Day……I’ll do the OIS tomorrow when everyone gets back.

10:30 Dallas Fed Manufacturing Outlook
12:00 PM ChicagoFedMidwestManufacturing Index
1:00 PM Results of $44B, 2-Year Note Auction
4:30 PM Money … …READ MORE

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Fed's Disaster Movie

By Admin | Published: November 18, 2009

President and CEO of the Federal Reserve Bank of St. Louis James Bullard said that policy makers may not start to raise rates until early 2012 while facing a “too low for two long” argument that may “weigh heavily” on the central bank. “The main challenge for monetary policy going forward will be how to adjust the asset purchase program without generating inflation and still providing support to the economy while interest rates are near zero.”

This should come as no surprise coming from Bullard. Back on September 1st, Bullard said the Federal Reserve interest rate hikes may be “quite … …READ MORE

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Red Flag on Interest Rates from The Fed

By Admin | Published: September 30, 2009

For the second day in a row, we have warnings from the Federal Reserve on a potential quick reversal of the massive quantitative easing program. Today, we have Philadelphia Federal Reserve President Plosser providing these headlines:

18:00 29Sep09 RTRS-PHILADELPHIA FED PRESIDENT PLOSSER: SIGNS ECONOMY “TURNING A CORNER”
18:00 29Sep09 RTRS-PLOSSER: FED WILL NEED TO ACT PROMPTLY, “PERHAPS AGGRESSIVELY” WHEN TIME COMES TO EXIT
18:00 29Sep09 RTRS-PLOSSER SAYS BELIEVES FED WILL NEED TO ACT BEFORE JOBLESS RATES HAVE RETURNED TO ACCEPTABLE LEVELS
18:00 29Sep09 RTRS-PLOSSER: OUTLOOK FOR INFLATION IN NEAR-TERM REMAINS SUBDUED
18:00 29Sep09 RTRS-PLOSSER SAYS SEES GREATER RISK OF HIGHER … …READ MORE

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