H I INFLATION-/ZINS-/WÄHRUNGSENTWICKLUNGEN I INFLATION-/INTERESTS-/CURRENCIES DEVELOPMENTS

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Fed seen waiting longer to cut rates as inflation stays elevated (13.02.2024)
Fed seen waiting longer to cut rates as inflation stays elevated (13.02.2024)
If this keeps up with another month or two of inflation staying high, you can kiss a June (rate cut) goodbye and we’re probably looking at September,” said Peter Cardillo, chief market economist at Spartan Capital Securities. "It’s a hotter-than-expected report and it’s part of what the Fed has been alluding to when it says it’s too early to say that inflation has been beaten.
After Tuesday's inflation report, traders previously betting on a rate cut at the Fed's April 30-May 1 meeting now see June as more likely.
The consumer price index was up 3.1% in January from a year earlier, down from its 3.4% pace in December but more than the 2.9% economists polled by Reuters had been expecting.
·reuters.com·
Fed seen waiting longer to cut rates as inflation stays elevated (13.02.2024)
Why the Federal Reserve has made a historic mistake on inflation (23.04.2022)
Why the Federal Reserve has made a historic mistake on inflation (23.04.2022)
Rates that high would tame rising prices—but by engineering a recession. In the past 60 years the Fed has on only three occasions managed significantly to slow America’s economy without causing a downturn. It has never done so having let inflation rise as high as it is today.
In September 2020 the Fed codified its new views by promising not to raise interest rates at all until employment had already reached its maximum sustainable level.
The result was a mess which the Fed is only now trying to clear up. In December it projected a measly 0.75 percentage points of interest-rate rises this year. Today an increase of 2.5 points is expected. Both policymakers and financial markets think this will be enough to bring inflation to heel. They are probably being too optimistic again. The usual way to rein in inflation is to raise rates above their neutral level—thought to be about 2-3%—by more than the rise in underlying inflation. That points to a federal-funds rate of 5-6%, unseen since 2007.
·economist.com·
Why the Federal Reserve has made a historic mistake on inflation (23.04.2022)
America’s inflation spike begins (13.04.2021)
America’s inflation spike begins (13.04.2021)
Yet investors could be forgiven for asking questions of the economists’ models. These have consistently underestimated the pace of America’s jobs rebound. In the second quarter of 2020 the median respondent to the Philadelphia Federal Reserve Bank’s survey of professional forecasters thought unemployment two quarters later would average 11%; in fact it turned out to be only 6.8%. That was the biggest overestimate in the history of the survey and more than three times the next highest such error. In February this year forecasters expected unemployment in the second quarter to average 6.1%, only for it to fall below that rate in March. If the labour market continues to outperform expectations the economy will eat up slack and push up inflation sooner.
·economist.com·
America’s inflation spike begins (13.04.2021)
Holzmann: 2024 nicht auf EZB-Zinssenkungen verlassen (15.01.2024)
Holzmann: 2024 nicht auf EZB-Zinssenkungen verlassen (15.01.2024)
Wenn die geopolitischen Risiken dazu führen, dass die Ölpreise steigen, würden die Gaspreise in die Höhe schießen, und das würde auch eine Reihe von Branchen treffen, die bereits betroffen sind. Vielleicht sogar die Dienstleistungsbranche”, sagte er. „Dann ist eine Rezession nicht unwahrscheinlich.”
„Und mit all dem Wissen, das wir derzeit haben, wäre es nicht ehrlich, das zu tun, weil wir nicht wissen, wie sich die Inflation entwickeln wird.”
Holzmann bekräftigte eine Argumentation von Ratskollegen, darunter EZB-Präsidentin Christine Lagarde und Chefvolkswirt Philip Lane, dass es “viel zu früh” sei, über eine Senkung der Zinsen zu sprechen.
Die geopolitische Bedrohung hat zugenommen,
Die geopolitische Bedrohung hat zugenommen, ich denke nicht, dass das, was wir bisher von den Huthis gesehen das Ende ist.
„Wir sollten überhaupt nicht auf eine Zinssenkung im Jahr 2024 setzen.”
·diepresse.com·
Holzmann: 2024 nicht auf EZB-Zinssenkungen verlassen (15.01.2024)
Will America manage a soft landing in 2024? (04.01.2024)
Will America manage a soft landing in 2024? (04.01.2024)
The other reason for caution is that talk of a soft landing often occurs just before recession strikes (see chart). And that is in normal business cycles. Since the pandemic forecasters have performed poorly, underestimating growth and, until recently, inflation. That they now think a soft landing is arriving is good news. But don’t believe it until you see it
Financial markets are rejoicing at the prospect of such a “soft landing”.
But on those occasions inflation had not reached anything like the highs it did in 2022. That the Fed raised interest rates so fast in 2022 and 2023 would make a soft landing all the more exceptional.
There have been instances where rate rises have not led to a downturn, such as in the mid-1980s and late 1990s
It wants to loosen monetary policy in part because it believes that the natural resting-point of interest rates is lower than their current level. If the Fed is wrong, interest-rate cuts will act as an undue stimulus and inflation will reaccelerate. Fiscal policy will also still look on a crisis setting, given America’s enormous underlying deficit, which reached 7.5% of GDP during the 2023 fiscal year. Cutting that significantly could hurt.
In the early 1950s and the early 1970s, recessions struck nearly a full year and a half after inflation fell.
·economist.com·
Will America manage a soft landing in 2024? (04.01.2024)