News
Bloomberg | India’s Inflation Accelerates to 9.44%, Adding to Interest-Rate Pressure
India’s inflation accelerated, sustaining pressure on the central bank to tighten monetary policy this month, even as price gains that were less than economists estimated boosted optimism the longest stretch of interest-rate increases in a decade is nearing an end.
Fox Business |
Producer Prices Post Steepest Drop Since February 2010
The Producer Price Index slumped 0.4 percent, twice as fast as expected, following a 0.2 percent rise in May, Labor Department data Thursday showed. Gasoline prices slumped 4.7 percent, and residential electric power costs declined a record 2 percent.
Market Watch | In China, interest follows inflation
China’s central bank announced the third interest rate hike of the year, three days after the National Bureau of Statistics released the consumer price index (CPI) figures for June which rose 6.4% year-on–year — a three-year high.
Bloomberg | Dollar Index Declines on Fed Stimulus Signal, Moody’s U.S. Credit Review
The Dollar Index declined for a third day after Federal Reserve Chairman Ben S. Bernanke said the central bank is prepared to take additional action to boost the economy.
CNBC | Don’t Fight the Fed' Has Worked for 20 Years: Analyst
However, at that time Ben Bernanke and his disciples started talking QE2, which was actually implemented a couple of months later. Inflation expectations rose, money moved into more risky assets in a rarely seen 'risk-on' move and the rest is history.
Market Watch | Fed weighing further easing, Bernanke says
Just two weeks after completing a second extraordinary effort to juice the moribund U.S. economy, the Federal Reserve is contemplating more “untested” steps, the head of the central bank said Wednesday.
WSJ | Fed Chief Open to New Options
"The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might re-emerge, implying a need for additional policy support," Mr. Bernanke said, suggesting the central bank had several ways to ease financial conditions, if necessary.
Econ Comments
Market Watch | PPI, import drops point to first CPI fall in year
The declines in producer and import prices during June have reinforced expectations the Labor Department on Friday will report the closely watched consumer price index dropped in June for the first time in a year. Economists polled by MarketWatch expect a 0.2% monthly drop in the consumer price index.
AEI | The Limits of Monetary and Fiscal Policy
Monetary policy has reached its limits. The significant risk of deflation that prompted last year's second round of quantitative easing has passed, and with inflation rising, monetary stimulus is no longer an option.
Blogs
Heritage Foundation | Fed Chairman Bernanke Projects Continued Slow Growth in Economy
Bernanke also reiterated a line that has become a White House talking point of late—that the soft economy can be chalked up to factors outside the Administration’s control (President Obama called them “bumps on the road to recovery.”) Here’s how Bernanke described those conditions:
