- 01 Feb 2023 09:38
#15263565
Inflation has peaked, the supply side is recovering, and the interest rate rises were for what?
Wednesday, February 1, 2023
Bill's Introduction
What were the central bankers thinking?
...snip...
Bill does not say this, so I will. The central banks should roll the interest rates back down quickly. This will help the many gov. fight off right wing attacks. In the US this would help the Dems protect democracy from the Repuds who want to tear it down. It would reduce the chance of an unnecessary recession, which the world doesn't need with a war going on. Who wants us to lose this war?
IMHO YMMV
Link -> http://bilbo.economicoutlook.net/blog/?p=51204
.
Wednesday, February 1, 2023
Bill's Introduction
So the IMF has come late to the transitory inflation party. What was obvious months ago is now at the forefront of IMF forecasts. Better late than never I suppose. It is becoming clear that most indicators are still not predicting a major demand-side collapse in most nations. Growth has moderated slightly and the forward indicators are looking up. At the same time, the inflation data around the world is suggesting the price pressures have peaked and lower inflation rates are expected. Real wages continue to fall, which means that the inflationary pressures were not being driven by wages. So no wage-price spiral mechanism at play. And PMI data and related indicators (such as shipping costs, etc) suggest the supply constraints which drove the inflationary pressures are easing. So has all this been the work of the interest rate rises imposed on nations by central bankers (bar Japan)? Not likely. The rising interest rates and falling inflation are coincidental rather than causal. Which means the damage to low income debt holders and the bank profits boom from the higher rates was for what?
What were the central bankers thinking?
...snip...
Bill does not say this, so I will. The central banks should roll the interest rates back down quickly. This will help the many gov. fight off right wing attacks. In the US this would help the Dems protect democracy from the Repuds who want to tear it down. It would reduce the chance of an unnecessary recession, which the world doesn't need with a war going on. Who wants us to lose this war?
IMHO YMMV
Link -> http://bilbo.economicoutlook.net/blog/?p=51204
.