Tokyo CPI down again supports BOJ dovish stance for now
Source: Bloomberg
You can measure the concrete effects of inflation on your purchasing power over time by using this CPI Inflation calculator
https://lnkd.in/eFFzyTpu (This applies to the US only)
While many economists and financial analysts look at the 1970s as a potential playbook for the current decade, the 1940s could be an interesting reference to consider as well
The 40s was a decade of war and high budget deficit and rising debt level in the US. Monetary policy was mainly about financial repression, i.e keeping rates low despite temporarily high inflation. Overall, it was positive for risk assets. Source: Win Smart, FRED
Ocean Freight
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Longer-term US inflation expectations have fallen dramatically over the past two months, to close to the Fed's 2% target
Source: Bloomberg
“The reports of my death are greatly exaggerated.” Mark Twain, 1897
Source: Lawrence McDonald, Bloomberg
What a headline...
Hafize Gaye Erkan, the new head of Turkey’s central bank, said rampant inflation has priced her out of Istanbul’s property market, leaving the former finance executive with no choice but to move back in with her parents. “We haven’t found a home in Istanbul. It’s terribly expensive. We’ve moved in with my parents,” 44-year-old Hafize Gaye Erkan, who took up her post in June after two decades in the United States, told reporters. Source: Wall Street Silver
Is Fed making the same error as the mid 1970s?
In the 1970s they also thought they had beat inflation in 1974-1975, they lowered rates and then inflation roared back to even higher levels in the late 1970s. Inflation on came down in early 1980s because of two factors. 1) massive new oil (energy) supply from Alaska, Gulf of Mexico, North Sea and huge new fields in Mexico coming online. 2) 18% interest rates crushed the economy. Source: Wall Street Silver
