News
WSJ | Euro-Zone Data Underline Inflation Risk
Factory-gate prices in the euro zone posted their sharpest annual gain for two-and-a-half years in March, putting more pressure on the European Central Bank to tighten monetary policy further, official data showed Tuesday.
Bloomberg | Treasury 10-Year Yields Reach Six-Week Low as Fed Buys, Economy Pace Slows
Six-month rates dropped to a record yesterday as demand for shorter-dated securities was boosted by the reduction in sales and speculation the Federal Reserve will keep monetary stimulus. Threats of reprisals for the death of al-Qaeda’s leader buoyed longer-maturity Treasuries yesterday on demand for safety. The Central Intelligence Agency must stay “vigilant,” said Director Leon Panetta, who oversaw the mission.
Market Watch | Banks willingness to lend at 17-year high: Fed
Banks are more willing to make loans to consumers than anytime in the last 17 years, according to a survey released by the Federal Reserve on Monday.
WSJ | OECD Inflation Rate Rises
Figures released by the Organization for Economic Cooperation and Development on Tuesday showed consumer prices in its 33 members rose by 2.7% in the 12 months to March, having risen by 2.4% in the 12 months to February.
Bloomberg | http://www.bloomberg.com/news/2011-05-02/asia-seeks-to-diversify-record-reserves-as-u-s-dollar-declines.html
Ten Southeast Asian nations, along with China, Japan and South Korea, plan to discuss an infrastructure fund to boost investment in roads, ports and utilities at a meeting of finance officials that started today in Hanoi. Policy makers have agreed to look for “new avenues” for reserves, the Philippine central bank chief said last month, urging greater use of China’s yuan.
Econ Comments
Minyanville | Outcome of Fed's Measures Won't Be Inflation or Deflation, but "Stankflation"
That is, inflation in the things average Americans need, like food and energy, coupled with prolonged and pronounced deflation in the value of their homes and their real wages.
Bloomberg | Low Fed Policy Rates Pose ‘Immediate Threat,’ Pimco’s Gross Says
A fed funds target rate at virtually zero poses an “immediate threat” to bond holders facing rising inflation and negative real yields, said Pacific Investment Management Co.’s Bill Gross in his monthly investment outlook.
Market Watch | The Fed’s impossible dream
Keeping both inflation and unemployment low is extremely difficult — if not impossible.
Bloomberg | Bond Vigilantes Ignore Next Stage of Euro Mess: Matthew Lynn
“It won’t be long before bond investors turn to France after they have finished with Portugal and Spain,” Xavier Rolet, the chief executive officer of London Stock Exchange Group Plc, told the Independent newspaper in December.
Minyanville | Five Things You Need to Know: How to Manage Competing Waves of Inflation and Deflation
While monetary growth is increasing, the real economy remains highly leveraged to real estate, debt exchange and high velocity transactions.
Blogs
The Economist: Free exchange | The commodity-price speed limit
I'm actually fairly optimistic about the global economy's ability to grow over the long-term despite slowing growth rates in the supply of various commodities. It's the medium-term that's likely to prove difficult.
Forbes | The Fed Undermines Trust In the Dollar
Bernanke certainly provided the world with a clear explanation of the Fed’s policies. But he lost his “All In” bet that a clear explanation would increase trust in the Fed’s ability to stabilize the value of the dollar.
