Fed Watch: Inflation Hysteria

It appears that a case of inflation hysteria is gripping Wall Street. Joe Weisenthal at Business Insidersums up the current state of play: Here’s what’s on Wall Street’s mind right now: Inflation is finally happening, and the Fed will end up being behind the curve. …there were two big moments this week. 1) There was the […]

Spain: The Land Where Incipient Deflation Becomes Good News for Headline GDP (Updated 29/05/2014)

The Spanish National Statistics Office (INE) today published the first detailed estimate of Spain’s Q1 GDP. Basically they confirm the gist of the original Bank of Spain numbers (see my report of 25 March below) although there are some important nuances. In my earlier report, I stressed that Spain’s Q1 surge was as much a […]

Is the Fed Near Its Target?

The BLS reported on Friday that the U.S. unemployment rate fell all the way to 6.3% in April. That marks significant progress in terms of thebull’s eye of Fed accountability proposed by Federal Reserve Bank of Chicago President Charles Evans which Econbrowser discussed 2 months ago. The unemployment rate has dropped steadily over the last 4 years with no […]

Is U.S. Inflation Headed Higher?

Has the slow decline in the pace of consumer price inflation in the US hit bottom? If so, is that good news for the economy? A cautious “yes” applies in both cases, albeit with the usual caveats. Looking at the core reading of consumer price inflation through last month suggests that the price trend has […]

ECB Policy Outlook: ‘Firmly Anchored’ Inflation Expectations Mean No Postponement of Purchases?

This article from former European Central Bank board member Jürgen Stark (Doomsayers risk a self-fulfilling prophecy) has been occasioning a lot of commentary over the last week or so. According to Stark, the current deflation debate “lacks three important points: an in-depth analysis of the forces driving inflation down; a clear distinction between “benign disinflation” […]

UK Inflation Falls—and a Puzzle

The UK’s February inflation figures were good, showing a drop in consumer price inflation from a below-target 1.9% to even further below target at 1.7%. If the squeeze on real wage growth had not already ended – as I think it had – it is clearly on the run now. Inflation has not been this […]