Higher inflation is expected to keep the Fed from cutting interest rates further, which is likely to limit the appeal of gold and silver.¹⁾

Lower interest rates increase liquidity in the economy and the borrowing costs decline.²⁾

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.”

• 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 lower ore quality, which means more rock has to be crushed to extract the same amount of metal.

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.

• 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.

Two percent is supposed to be the sweet spot for inflation, low enough for consumer comfort but relaxed enough for the economy to flourish, according to Fed doctrine settled years ago.³⁾

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 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 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.

A gauge of inflation in the euro area and the main measure watched by the European Central Bank.

A measure of price pressures and test of how long the world’s most audacious monetary experiment continues.

bloomberg.com/world-economic-indicators-dashboard

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.

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/

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/