A slower #growth and cooling #inflation environment will allow #Fed to gradually reduce rates next year, thus stabilizing #real yields and potentially biasing them lower, notes Jordan Jackson @JPMorganAM

US #inflation gauges, chart @reutersMikeD https://tinyurl.com/426dukvt

#survey US #median #inflation expectations declined slightly to 2.8% at the medium-term horizon and rose marginally to 3.6% (short-term) and 3.0% at the longer-term horizons, chart @NewYorkFed https://tinyurl.com/mtb87cht

So Catherine Mann (of the BoE's MPC - which sets #interestrates), thinks they need to go (even) higher to squeeze #inflation out of the UK's economy.... indeed, showing little regard for the effects, she told a Canadian audience; 'I would rather err on the side of over-tightening'!

The Q. is whether she can convince other members to keep raising rates further, seemingly uncaring whether squeezing inflation out of the economy actually squeezes the life out of it at the same time....

#euro Last week @Isabel_Schnabel #ECB warned of risks of re- #inflation amit deteriorating growth, chart @opinion https://tinyurl.com/4s2wu55d

EUR 5y5y #inflation #swap has risen to the level of the US 5y5y #inflation swap. This looks mispriced in part b/c historically economic differences mean that on average, the EU measure has been 60bp below the US measure, chart @TS_Lombard

The problem for #JeremyHunt in trying to claim #political kudos from a 'fall in inflation', is that for most people there is ether #inflation or there isn't, they care little about shifts in the rate and only attend to the prices they experience.

As Johnny Runge (KCL) puts it:
'Many will not believe that inflation has fallen or the government pledge has been achieved, because they will not feel prices have fallen — because they haven’t'!

Oh dear...

"Do Tax Increases Tame Inflation? The answer is 'yes' for personal income taxes...Using narrative-identified US federal tax changes post-World War II and disaggregated sectoral data on consumer and producer prices, we show that higher average personal income tax rates lower prices across a broad range of sectors"
-- American Economic Association paper, April 2023
https://www.aeaweb.org/articles?id=10.1257/pandp.20231070
Full PDF here:
https://qmro.qmul.ac.uk/xmlui/bitstream/handle/123456789/89399/Mumtaz%20Do%20Tax%20Increases%20Tame%20Inflation%3F%202023%20Accepted.pdf?sequence=2&isAllowed=y
--
#economics #AEA #inflation #taxes

When central banks (CB) attack the demand side of inflation, they should employ at least some tactics that target upper incomes or wealth. After all, those targets are most responsible for demand-side inflation:
https://hachyderm.io/@jrefior/110701318560000924

Plus we have extreme #inequality.

There are probably many ways to do this, and they start with congress/parliament. My idea was to set a base wealth tax, and empower the CB raise the rate when inflation is high.
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#inflation #economics #fed #MonetaryPolicy

Egypt Inflation Hits Record High of Nearly 40%

> According to the state statistics agency [..] the surge in prices is particularly pronounced in the food and drink sector, which saw a staggering 71.9% increase compared to August 2022. These rising costs are adding to the financial burden faced by families struggling to make ends meet.

https://gatekeepersnews.com/2023/09/10/egypt-inflation-hits-record-high-of-nearly-40/ #Egypt #inflation

"In the beginning, what drove inflation was energy, commodity and goods prices going up..All in reaction to COVID impacts and supply chains.

"That’s mostly under control now.. What’s still going up is housing and service prices. Those are harder to unwind quickly.. what economists call ‘sticky.’”
https://www.marketplace.org/2023/08/25/two-percent-inflation-tricky/
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#inflation #economics #Marketplace

"Ever since the greedflation crisis began, the Bank of England has been attacking workers’ wages while downplaying corporate profiteering.

“Now the central bank’s own analysis supports what Unite has argued all along about inflation. Companies are raising prices simply to boost their own profit margins.”
Sharon Graham, General Secretary of Unite
#Greedflation #Inflation #Profiteering #BankOfEngland #InterestRates

https://www.theguardian.com/business/2023/sep/09/now-even-the-bank-of-england-admits-greedflation-is-a-thing

Aha, the #Tories are exploring ways of cutting non-pension #benefits in the run up to the next #election to give #JeremyHunt the fiscal headroom to cut #taxes.

For anyone who has ever argued that #voting has little effect, the higher incidence of voting among pensioners seems to give them a degree of 'protection' unavailable to other classes of people in need of state support;

and don't forget, the #tripplelock will ensure state pension rises will nearly match #inflation, unlike most #wages

If #inflation continues to cool at the same time #Fed holds rates, this means the real policy rate (nom policy rate minus inflation) is getting more restrictive without #Fed doing anything at all, chart Madison Faller @JPMorganAM

US underlying #inflation may already be near #Fed ’s target, despite the ups and downs of #commodity prices, traditional ex #food and #energy inflation, and the core services ex #housing CPI or PCE measures, notes @GoldmanSachs

The continued positive #inflation and #labor market news has led us to cut our estimated 12-month US #recession probability further to 15%, down 5pp from our prior estimate, notes @GoldmanSachs

Gibt’s schon Schlagzeilen, dass es in #Deutschland im Juli einen neuen Beschäftigungsrekord gab? Weiß man schon Genaueres?🫢

46 Millionen in Arbeit - so viele wie noch nie!

Und das mitten in der angeblich tiefsten #Wirtschaftkrise seit Jahrzehnten (#Bild / #Welt), in der Vermögen der reichsten 1% um 40 % zulegten, die der unteren Hälfte aber um 8% abzüglich #Inflation.

So viel zu neoliberalem #FDP +0 #CDU -Kitsch, nach dem Wohlstand nach unten durchsickert, wenn es nur den Reichsten gut geht.

https://www.cbc.ca/news/canada/calgary/carbon-tax-inflation-tiff-macklem-calgary-1.6960189 “with year-over-year #inflation lately hovering around three per cent, this means the #CarbonTax causes one-twentieth of price increases. When inflation peaked at just above eight per cent last year, the carbon tax would have been responsible for one-54th of it.”

In den Gesprächen mit unseren Mitgliedern merken wir: Die Sorge um die steigenden #Preise und #Lebenskosten nimmt zu. Berechtigterweise. Sie geht durch alle Branchen, alle Betriebe, alle Einkommensstufen», so Natascha Wey, VPOD.

#preiseraufloehnerauf ‼️#inflation #teuerung #teuerungsausgleich #mieten #krankenkassen #energiepreise

https://vpod.ch/news/2023/08/nur-fuer-teppichetagen/

@tagesschau Man darf bitte auch hinzufügen, dass Lebensmittelpreise auch wegen der Unwetter steigen.

Viele Ernten sind ausgefallen. Und in Griechenland ist zum Beispiel das Lager weggespült worden, in dem der Feta-Käse für den Deutschen Markt lagerte.

Diese Produkte werden jetzt knapp und teuer. Bitte berichtet drüber! Nicht die Regierung ist schuld an den hohen Preisen!!!

#Inflation #Lebensmittel