News
CNN: Money | Stagflation signs: Bond yields down. Gold up
If you look beyond the latest carnage in stocks Thursday, investors are clearly sending a signal that they are worried both about stagnation and inflation. But the emphasis seems to be more on the "stag."
WSJ | Inflation Rise Puts Fed in Bind
U.S. inflation surged in July primarily because of climbing energy and food prices, but those costs are likely to retreat in coming months as prices for oil, grains, and other raw materials fall in a lagging economy. Underlying price pressures remain strong, however, which could constrain the Federal Reserve from taking more action soon to spur economic growth and hiring.
Bloomberg | Jackson Hole Central Bankers Reflect on QE2 Amid Pressure for New Stimulus
Bernanke will be making “a major speech and the chairman knows the whole world is watching, so if he chooses not to say very much, the markets and the economy in some broader sense would be disappointed,” said Soss, a former economist at the Federal Reserve Bank of New York. “It’s absolutely critical that the Federal Reserve portray itself as having some relevance to the economic problems the society faces.”
Market Watch | China lacks support for more stimulus: CS
China’s policy makers remain focused on inflation as the major risk to the economy and lack the public support for a new round of stimulus spending, according to Credit Suisse, which said its impressions were formed after recent discussions with officials in Beijing.
Blogs
Political Calculations | New Deflationary Expectations Taking Hold?
Once upon a time, we found that stock prices are a contemporary indicator of the state of the U.S. economy, meaning that instead of telling us what's going to happen in the future, they tell us what's happening today.
Daily Capitalist | The Fed: “Whatever It Takes”
In order for the FOMC to keep the funds rate within the desired range, it will have to purchase whatever government debt exists or is issued into the market. This amounts to establishing a de facto QE3 policy without announcing ex ante the amount of securities it intends to purchase. Instead, the amounts purchased will be “whatever it takes.”
