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--- 0_public:macro:inflation [2024/12/09 21:49] – removed - external edit (Unknown date) 127.0.0.1
+++ 0_public:macro:inflation [2025/02/09 00:07] (current) – pointnm
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+====== Inflation ======
+And again, in an environment of inflation, then you seek tangible assets from an investment perspective.((https://archive.ph/LYWTE#selection-7967.0-7970.0))
+Higher inflation is expected to keep the Fed from cutting interest rates further, which is likely to limit the appeal of gold and silver.((https://archive.ph/xLsTd#selection-8311.0-8314.0))
+<wrap hi>Lower interest rates increase liquidity in the economy and the borrowing costs decline</wrap>.((https://archive.ph/xLsTd#selection-8411.0-8414.0))
+Aframax 3y period charters are a key part of the PPI. Jerome Powell recently said, “When period charters start to fall, it will be a clear sign that we’re winning the battle against inflation. Nothing says economic stability like affordable transoceanic crude transport.”
+===== Cause of Inflation =====
+  * mass influx of money (in a country)
+Commodities are very highly correlated with inflation, and commodities are initially the driver of inflation.
+Inflationary pressure is coming from <wrap hi>lower ore quality</wrap>, which means<wrap hi> more rock has to be crushed to extract the same amount of metal</wrap>.
+US inflation data, which could determine whether the Federal Reserve will continue to raise interest rates or begin easing off its hawkish policy.
+This week will yield answers on how the US economy will go into recession, which means the short-term crude demand outlook will become clearer, Moya said.
+That would reflect how a global consumer-price shock in the wake of the pandemic, further exacerbated by Russia’s war in Ukraine, has transitioned asymmetrically, with some economies facing stronger domestic price pressures than others.
+In turn, the world now features a patchwork of different policy dynamics, in contrast to the largely synchronized response that central banks previously engineered.
+===== Stronger-than-expected reading =====
+  * **Effect on Gold**: The market now awaits US inflation data due for release on Tuesday for further clues on the US monetary policy. A stronger-than-expected reading would cap further gains in the precious metal.
+===== 2% =====
+Two percent is supposed to be the sweet spot for inflation, <wrap hi>low enough for consumer comfort but relaxed enough for the economy to flourish</wrap>, according to Fed doctrine settled years ago.((https://www.nytimes.com/2023/03/24/business/inflation-federal-reserve-interest-rates.html))
+===== Taylor Rule =====
+When thinking about where rates ought to be, economists rely on a variety of models. Many of them are riffs
+on the Taylor rule, put forth by Stanford’s John Taylor in 1993. The complexity of these Taylor-style models varies, but in essence, they typically look at what inflation is doing versus where the central
+bank wants it, how fast the economy is growing versus an assumption of how fast it ought to grow
+without moving inflation off target, and spit out an answer. The [[https://www.atlantafed.org/cqer/research/taylor-rule | Federal Reserve Bank of Atlanta has set up a “Taylor Rule Utility” webpage]] that provides the outputs from three Taylor-style models, each of which shows that under reasonable assumptions, the Fed’s target rate ought to have been lower in the fourth quarter, heading lower still this quarter.
+The [[https://www.clevelandfed.org/indicators-and-data/simple-monetary-policy-rules | Federal Reserve Bank of Cleveland does a similar exercise across seven models]]. Its most recent update, in December, showed that the median “right” level for rates as of the fourth quarter was 5.1%, falling to 4.8% in the current quarter and 3.9% by year-end.
+===== Euro-Area Inflation =====
+A gauge of inflation in the euro area and the main measure watched by the European Central Bank.
+===== Japan Inflation =====
+A measure of price pressures and test of how long the world’s most audacious monetary experiment continues.
+[[https://www.bloomberg.com/graphics/world-economic-indicators-dashboard/#xj4y7vzkg|bloomberg.com/world-economic-indicators-dashboard]]
+===== Core Inflation =====
+Core inflation is defined as the year on year percentage change in the euro area HICP special aggregate 'all items excluding energy, food, alcohol and tobacco', as published by Eurostat.
+===== Easter Effect =====
+In March, services inflation will be impacted by the Easter effect again, as the holiday comes early this year. https://think.ing.com/articles/key-events-in-developed-markets-next-week2803/
+===== Holidays =====
+That adds to inflation due to early holidays, but should subtract from it in May. https://think.ing.com/articles/key-events-in-developed-markets-next-week2803/