…although it helps.
I never thought an advanced economy government could pursue stupider policies than that implemented under the Trump administration. Consider me corrected on this point – case in point, the United Kingdom in 2022.
Category Archives: inflation
Did US Inflation Accelerate Relative to Euro Area?
Yes, for core, no for headline:
PPI in August, and Possible Implications for the CPI
M/M PPI at Bloomberg consensus, core slightly above. At the m/m, q/q and y/y horizons.
Inflation in August
Readings exceeds expectations, m/m 0.6% vs. 0.3% Bloomberg consensus (0.1% vs -0.1% core).
Inflation Breakevens: Common and Uncommon Shocks
Assuming unadjusted nominal-real yields are a good indicator of inflation expectations (see yesterday’s post for why maybe not), it’s interesting to see how market based inflation expectations have moved over the recent past (pre-today’s ECB decision):
Market Based Expectations of Five Year Ahead Inflation
It might be misleading to rely to heavily on simple inflation break even calculations, which show inflation over the next five years lower today than they were on the even of the expanded Russian invasion of Ukraine.
When Lacking Policy Proposals, Attack Diversity
One Year Ahead CPI Inflation Expectations [figure updated 8/26]
Down slightly, in August, for Michigan and Survey of Professional Forecasters.
Glick, Leduc, Pepper: “Will Workers Demand Cost-of-Living Adjustments?”
That’s the title of a recent SF Fed Economic Letter, by Reuven Glick, Sylvain Leduc, and Mollie Pepper.
Households are currently expecting inflation to run high in the short run but to remain muted over the more distant future. Given this divergence, what role do short-run and long-run household inflation expectations play in determining what workers expect for future wages? Data show that wage inflation is sensitive to movements in household short-run inflation expectations but not to those over longer horizons. This points to an upside risk for inflation, as workers negotiate higher wages that businesses could pass on to consumers by raising prices.
US and Euro Area Headline Inflation Compared
Using flash estimates for Euro Area HICP. US inflation m/m , q/q falling: