Hyper Inflation could be just around the corner...coupled with shortages in a lot of sectors it could really hurt us on every level of our lives. The world I grew up in is gone and I fear for the next generation.
And we all know what happened in 2008. Ignore the misleading numbers below. Real inflation including food and energy is more like 26%
Global inflation hits highest level since 2008, OECD says
Inflation rose by the fastest pace in 12 years, OECD said
Consumer prices are rising across the world, pushing inflation levels in wealthy nations in April to the highest level in 12 years, the Organization of Economic Cooperation and Development said this week.
Rising energy prices pushed annual inflation across the 36 members of the OECD to 3.3% in April, the fastest pace since October 2008. That's compared with an increase of 2.4% in March.
Even excluding food and energy – which tend to be more volatile – prices across the world surged in April, the Paris-based organization said, jumping 2.4% in April, compared with 1.8% in March.
The sudden rise in inflation has unsettled investors, particularly as the Biden administration pushes forward with a $6 trillion budget proposal that some experts worry could push prices even higher.
"Market worries surrounding high and accelerating inflation stem from the risk that pent-up demand, strong fiscal stimulus and the Fed’s commitment to keep policy rates on hold will cause overheating," Moody’s Analytics said in a note to investors this week.
The Labor Department reported last month that U.S. consumer prices for goods and services surged 0.8% in April, the largest monthly increase in more than a decade and the fastest year-over-year jump since 2008. Excluding the volatile food and energy data, core inflation rose 0.9% in April and 3% over the past 12 months.
The Federal Reserve, led by Chairman Jerome Powell, has acknowledged that easy monetary policy combined with fiscal spending will lead to a temporary increase in prices amid surging demand. But Powell has repeatedly dismissed concerns of persistent inflation and has remained committed to holding interest rates near zero, where they have sat since March 2020.
Economic projections from policymakers' last meeting show that most officials expect rates to remain near zero through 2023.
https://www.foxbusiness.com/economy/global-inflation-highest-level-oecd
Global inflation hits highest level since 2008, OECD says
Inflation rose by the fastest pace in 12 years, OECD said
Consumer prices are rising across the world, pushing inflation levels in wealthy nations in April to the highest level in 12 years, the Organization of Economic Cooperation and Development said this week.
Rising energy prices pushed annual inflation across the 36 members of the OECD to 3.3% in April, the fastest pace since October 2008. That's compared with an increase of 2.4% in March.
Even excluding food and energy – which tend to be more volatile – prices across the world surged in April, the Paris-based organization said, jumping 2.4% in April, compared with 1.8% in March.
The sudden rise in inflation has unsettled investors, particularly as the Biden administration pushes forward with a $6 trillion budget proposal that some experts worry could push prices even higher.
"Market worries surrounding high and accelerating inflation stem from the risk that pent-up demand, strong fiscal stimulus and the Fed’s commitment to keep policy rates on hold will cause overheating," Moody’s Analytics said in a note to investors this week.
The Labor Department reported last month that U.S. consumer prices for goods and services surged 0.8% in April, the largest monthly increase in more than a decade and the fastest year-over-year jump since 2008. Excluding the volatile food and energy data, core inflation rose 0.9% in April and 3% over the past 12 months.
The Federal Reserve, led by Chairman Jerome Powell, has acknowledged that easy monetary policy combined with fiscal spending will lead to a temporary increase in prices amid surging demand. But Powell has repeatedly dismissed concerns of persistent inflation and has remained committed to holding interest rates near zero, where they have sat since March 2020.
Economic projections from policymakers' last meeting show that most officials expect rates to remain near zero through 2023.
https://www.foxbusiness.com/economy/global-inflation-highest-level-oecd
Another miss on new jobs.
U.S. employers added fewer than expected jobs last month as extended unemployment benefits encouraged workers to stay home.
Employers added 559,000 jobs in May, the Labor Department said Friday, missing the addition of 650,000 jobs that analysts surveyed by Refinitiv were expecting. April’s reading was revised higher by 12,000 to 278,000.
U.S. employers added fewer than expected jobs last month as extended unemployment benefits encouraged workers to stay home.
Employers added 559,000 jobs in May, the Labor Department said Friday, missing the addition of 650,000 jobs that analysts surveyed by Refinitiv were expecting. April’s reading was revised higher by 12,000 to 278,000.
My gosh I've never seen so many ads in one twenty minute video! One of them was Stacy Abrams asking for help in stopping the Republicans. Lol!
And the only reason it was that high is the result of two dozen red states forcing folks off the teet finally.
the fed has begun to tighten it's policy. they have lost control over the lockdown and the economy is reopening fast. look at the companies that were almost put out of business for short term growth and profits. there is a fragrance company that stock was depressed down to 6 dollars and three of the fed chairs invested in their stock heavily a few days ago and now the stock is 18 dollars.
Is the Fed ‘tightening cycle’ already happening?
Last Updated: June 4, 2021 at 12:12 p.m.
By
Joy Wiltermuth
No tapering of Fed’s main bond-buying program yet
The Federal Reserve surprised markets this week by announcing it will begin to gradually sell off its corporate debt holdings accumulated during the pandemic, a tiny step toward dialing back its support for financial markets introduced last year during the onset of the coronavirus pandemic.
The central bank’s holdings of corporate bonds and related exchange-traded funds account for about $14 billion in combined assets, or roughly 0.1% of the $10.6 trillion U.S. corporate bond market.
But the Fed’s move away from corporate debt does signal a shift in its prior full-throttle approach to the crisis.
“I think it’s a good sign,” said Patrick Tadie, Wilmington Trust’s head of structured finance, adding that it shows the Fed thinks that “some supports in place for a while may not be as necessary, and that private-sector investors should be able to pick up the slack.”
The reaction in funds that specialize in U.S. corporate debt has been muted since Wednesday’s announcement, with the closely watched iShares iBoxx $ Investment Grade Corporate Bond ETF LQD, 0.68% on pace for a 0.2% weekly gain as of midday Friday. The iShares iBoxx $ High Yield Corporate Bond ETF HYG, 0.13% and the SPDR Bloomberg Barclays High Yield Bond ETF JNK, +0.12% were up less than 0.1% over the same stretch.
Stocks also were on pace for modest weekly gains, after the Dow Jones Industrial Average DJIA, 0.36% on Thursday snapped a five-day win streak.
Meanwhile, the return investors earn by owning corporate debt has dropped dramatically since the Fed swooped in roughly a year ago with its first-ever purchases in the sector.
Read: The Fed has bought $8.7 billion worth of ETFs. Here are the details
Investment-grade and high-yield U.S. corporate bond spreads, or the premium bonds pay over a risk-free benchmark, have been inching closer to 20-year lows, helped along by the Fed’s backstop.
So what’s the big picture? The Fed’s corporate assets represent a drop in the bucket compared with its record nearly $8 trillion balance sheet, which has nearly doubled in size since March 2020, mainly through its massive $120 billion-a-month program to buy risk-free Treasurys TMUBMUSD10Y, 1.551% and agency mortgage bonds.
That’s the main liquidity program the Fed talks about in terms of restarting asset purchases in a crisis or when considering “tapering” as the economy recovers.
While no tapering plans for that key bond-buying program have been put on the table yet, debate has emerged within the central bank about when to discuss scaling back purchases as the threat of COVID-19 subsides in the U.S. with ramped up domestic vaccinations and as progress picks up elsewhere.
New York Fed President John Williams weighed in Thursday, saying that he thinks it’s too soon for the central bank to start slowing down its asset purchases, but is open to future talks.
Signs of overkill with the Fed’s Goliath-like presence in the Treasury and mortgage-bond markets already might be emerging, particularly as banks struggle to find places to park cash overnight and housing prices skyrocket.
Read: Why demand for Fed’s reverse repo facility is surging again
Mortgage lending also has slowed as 30-year home loan rates have ticked up and as more eligible borrowers have refinanced during the pandemic, adding to concerns that the Fed’s $40 billion-a-month mortgage bond purchases might need to slow.
Still, some investors view the Fed’s corporate-debt exit as timely, particularly since the program has been a success in terms of helping to limit corporate defaults during a global public-health crisis, but also that it would be easy to restart.
“They came in with shock and awe,” said Nicholas Elfner, co-head of research at Breckinridge Capital Advisors. “Now they are pulling it back — but they are there.”
“Essentially, there is kind of a feeling that the Fed will be involved in U.S. bond markets, as needed,” he said.
“Why wouldn’t they do it again?”
Last Updated: June 4, 2021 at 12:12 p.m.
By
Joy Wiltermuth
No tapering of Fed’s main bond-buying program yet
The Federal Reserve surprised markets this week by announcing it will begin to gradually sell off its corporate debt holdings accumulated during the pandemic, a tiny step toward dialing back its support for financial markets introduced last year during the onset of the coronavirus pandemic.
The central bank’s holdings of corporate bonds and related exchange-traded funds account for about $14 billion in combined assets, or roughly 0.1% of the $10.6 trillion U.S. corporate bond market.
But the Fed’s move away from corporate debt does signal a shift in its prior full-throttle approach to the crisis.
“I think it’s a good sign,” said Patrick Tadie, Wilmington Trust’s head of structured finance, adding that it shows the Fed thinks that “some supports in place for a while may not be as necessary, and that private-sector investors should be able to pick up the slack.”
The reaction in funds that specialize in U.S. corporate debt has been muted since Wednesday’s announcement, with the closely watched iShares iBoxx $ Investment Grade Corporate Bond ETF LQD, 0.68% on pace for a 0.2% weekly gain as of midday Friday. The iShares iBoxx $ High Yield Corporate Bond ETF HYG, 0.13% and the SPDR Bloomberg Barclays High Yield Bond ETF JNK, +0.12% were up less than 0.1% over the same stretch.
Stocks also were on pace for modest weekly gains, after the Dow Jones Industrial Average DJIA, 0.36% on Thursday snapped a five-day win streak.
Meanwhile, the return investors earn by owning corporate debt has dropped dramatically since the Fed swooped in roughly a year ago with its first-ever purchases in the sector.
Read: The Fed has bought $8.7 billion worth of ETFs. Here are the details
Investment-grade and high-yield U.S. corporate bond spreads, or the premium bonds pay over a risk-free benchmark, have been inching closer to 20-year lows, helped along by the Fed’s backstop.
So what’s the big picture? The Fed’s corporate assets represent a drop in the bucket compared with its record nearly $8 trillion balance sheet, which has nearly doubled in size since March 2020, mainly through its massive $120 billion-a-month program to buy risk-free Treasurys TMUBMUSD10Y, 1.551% and agency mortgage bonds.
That’s the main liquidity program the Fed talks about in terms of restarting asset purchases in a crisis or when considering “tapering” as the economy recovers.
While no tapering plans for that key bond-buying program have been put on the table yet, debate has emerged within the central bank about when to discuss scaling back purchases as the threat of COVID-19 subsides in the U.S. with ramped up domestic vaccinations and as progress picks up elsewhere.
New York Fed President John Williams weighed in Thursday, saying that he thinks it’s too soon for the central bank to start slowing down its asset purchases, but is open to future talks.
Signs of overkill with the Fed’s Goliath-like presence in the Treasury and mortgage-bond markets already might be emerging, particularly as banks struggle to find places to park cash overnight and housing prices skyrocket.
Read: Why demand for Fed’s reverse repo facility is surging again
Mortgage lending also has slowed as 30-year home loan rates have ticked up and as more eligible borrowers have refinanced during the pandemic, adding to concerns that the Fed’s $40 billion-a-month mortgage bond purchases might need to slow.
Still, some investors view the Fed’s corporate-debt exit as timely, particularly since the program has been a success in terms of helping to limit corporate defaults during a global public-health crisis, but also that it would be easy to restart.
“They came in with shock and awe,” said Nicholas Elfner, co-head of research at Breckinridge Capital Advisors. “Now they are pulling it back — but they are there.”
“Essentially, there is kind of a feeling that the Fed will be involved in U.S. bond markets, as needed,” he said.
“Why wouldn’t they do it again?”
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