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my guess is YES ( no matter who wins )After peaking in April 2022, the M1 Money Supply has been slowly increasing again since April 2024. Are we due for another wave of higher inflation after the US election?
Not only due to that cause but others as well.Are we due for another wave of higher inflation after the US election?
Trump now the favourite, paying 1.60 vs harris's 2.30 on sportsbet.Trump now stating he will be increasing tariffs. Obviously a 50/50 shot of him winning currently.
Stainless?Back to inflation basics, I just paid nearly $13 for four nuts and bolts, M10 X 25mm
Yeah but what grade?Back to inflation basics, I just paid nearly $13 for four nuts and bolts, M10 X 25mm
No, no, no, not this little duck. I have worked very hard at retirement and now a fully trained retiree and have a diploma with honoursI............... and re-employ the retired workers.
Fair chanceI just hope Bunnings are not too focused on Just In Time and have sufficient in stock such that, when the Chinese spigot is turned off, we have enough supplies and time to retool, and re-employ the retired workers.
There are few signs that inflation is re-emerging across the US economy, which means it can still absorb two more modest interest rate cuts this year, the Bank of America chairman and CEO Brian Moynihan has said.
In an interview with The Australian, Moynihan said: “I don’t think people fear inflation is coming back”.
“The rate structure in the United States is still very restricted. Inflation is 3 per cent, the Fed Funds rate is at 4.75 per cent. That is a big drag on the economy”.
He said the US is showing all the signs of a more normal pre-pandemic economy, with consumer spending recovering and jobs and wages growth steady. Although business borrowing remains subdued, he noted.
His comments come amid broader signs the US economy is starting to pick up momentum at a faster rate. A sell-off in bond markets this week has stoked concerns inflation could re-emerge if the US Fed cuts too quickly.
Futures markets have fully priced in at least one more cut by the end of this year, possibly as early as November. Although just a few weeks ago, markets were more confident in tipping as many as two more rate cuts, following the Federal Reserve’s super-sized 50 basis point cut in September.
Moynihan is still tipping two more cuts this year from the US Fed, although he said the Federal Reserve will be “on guard” about inflation.
The BofA boss is visiting Australia as part of the bank’s 60th birthday celebration, he has also hosted a roundtable with a number of business leaders in Sydney, including Macquarie boss Shemara Wikramanayake.
BofA ranks as one of the biggest banks in the US and the world with a market value of $US325.2bn ($486.5bn), making it twice the size of Australia’s Commonwealth Bank.
It has among the biggest branch footprint across the US with nearly 70m consumer and business customers. It has more than US$3 trillion in assets, and employs more than 210,000 globally.
Moynihan told investors last week US consumer activity was “fine” despite concerns about the cost of living and high interest rates.
As the biggest main street bank in the US, Moynihan has the best line of sight in terms of activity through the economy, and broadly sees slowing growth and falling inflation. However, he has seen a pick-up in consumer spending in recent months with payments up 4 per cent to 5 per cent for the September quarter with the trend continuing into October.
“This activity is consistent with how customers are spending money in the 2016 to 1019 timeframe, when the economy was growing and inflation was under control”.
Business customers are a little more cautious around spending and investment, which is “consistent with a lower-growth economy,” Moynihan said.
BofA acquired then struggling Wall Street bank Merrill Lynch for $US50bn at the height of the global financial crisis.
This supercharged BofA’s growth across wealth management and delivered global investment banking to the conservative main street lender. Indeed, that deal created a banking major so vast it could provide branch banking in small town America to mergers and acquisition services on a global scale. Five years ago, it rebranded its retail wealth management business as “Merrill” and ran investment banking under a single BofA brand.
Moynihan, a one-time corporate lawyer, worked his way through BofA’s businesses, including consumer and small business banking. He was appointed to head up Merrill Lynch shortly after BofA took control, and was named group-wide CEO in 2010.
Although it controls one of Wall Street’s most-storied institutions, at its core the Charlotte, North Carolina-headquartered BofA remains a highly-conservative institution that leans into its southern heritage.
Through his tenure, Moynihan has talked up the need to drive organic growth by getting existing operations working more efficiently and putting the flurry of deal-making of his predecessors behind the bank. Today BofA is delivering smoother and predictable profits and in the past decade it has generated more than $US200bn in earnings.
His strategy built around “Responsible Growth” a phrase that has helped deliver a lower-risk BofA in the years following the GFC. The bank become one of the biggest beneficiaries during last year’s Silicon Valley Bank-led crisis, with tens of billions in deposits flowing to Moynihan’s bank.
Australia represents BofA’s fifth-biggest market outside the US with exposure of $US21bn in loans and commitments. This is just behind France at $US24bn and Canada at $US28bn.
???The new economic outlook by the International Monetary Fund [IMF] shows only Slovakia is expected to have higher inflation than Australia by the end of next year.Australia's 2024 economic growth forecast has also been downgraded to just 1.2 per cent.Treasurer Jim Chalmers will fly to Washington DC for high-level talks with the IMF, World Bank and G20 economies.
https://www.theaustralian.com.au/bu...r/news-story/51a2a3a2724905e095a23a0077144313
There are few signs that inflation is re-emerging across the US economy, which means it can still absorb two more modest interest rate cuts this year, the Bank of America chairman and CEO Brian Moynihan has said.
In an interview with The Australian, Moynihan said: “I don’t think people fear inflation is coming back”.
This story brought to you by the real estate lobby of australia.https://www.theaustralian.com.au/bu...r/news-story/51a2a3a2724905e095a23a0077144313
I take this as the closest we'll see to someone ringing an actual bell at the bottom of the inflation cycle to tell us it's going back up.
The enthusiasm for lower rates is in my view akin to someone who just survived cancer asking their doctor when they can start their heavy drinking and smoking again?
Um..... how about "never"?
My view is we haven't seen the peak of inflation yet, we're in the eye of the storm contemplating adding more fuel to the fire. Time will tell......
In case anyone wants to see it graphically:It's blatantly obvious at this stage, you either want to see it or you don't.
View attachment 186430
Two countries, two different outcomes. This makes upcoming investment decisions interesting, especially when you add in the uncertainties of the Middle East.
Australia's run of high inflation is predicted to surpass every advanced economy in the world bar one.
The new economic outlook by the International Monetary Fund [IMF] shows only Slovakia is expected to have higher inflation than Australia by the end of next year.Australia's 2024 economic growth forecast has also been downgraded to just 1.2 per cent.Treasurer Jim Chalmers will fly to Washington DC for high-level talks with the IMF, World Bank and G20 economies.
The boss of one of the world’s biggest bank says the US can still handle two more rate cuts this year
The West faces new inflation fears
Having moved in lockstep, America and Europe now have very different concerns
Central bankers have avoided celebrations and declarations of victory. They know full well that consumers and firms, stung by the highest inflation since the 1970s, would not appreciate them. In private, though, many are elated. The sharpest rise in borrowing costs in decades, dubbed “the great tightening” by the IMF, appears to have worked better than anyone expected. Global inflation has retreated to more comfortable levels. Better still, this has been achieved without a sharp rise in joblessness or a recession.
But as inflation continues to cool, new dilemmas are emerging. What is striking is how different they are on either side of the Atlantic. European policymakers, having dealt with the relatively novel phenomenon of high inflation, now worry they are returning to an older and more familiar problem: inflation that is too low, as the continent’s economic growth looks increasingly frail. At the same time, American central bankers are discovering that although they have made a lot of progress, inflation is still higher than they desire. The country’s economy is booming.
Until recently, inflation in the two regions had moved in lockstep. Analysis by the IMF, in the form of an advance chapter of the World Economic Outlook, to be published in full on October 22nd, makes clear the extraordinary nature of the recent inflationary wave. In the view of the IMF, it came in stages. First, during covid-19 lockdowns, demand for goods surged as supply chains came under pressure. Then, as economies re-opened, pent-up demand for services raised price pressures. Russia’s invasion of Ukraine exacerbated problems. By mid-2022 global inflation was triple its pre-pandemic average, and many of its causes applied to countries everywhere.
Beneath the surface, however, there were differences. American inflation was at first driven by the same sort of shocks as elsewhere, but from late 2021 a tight labour market contributed to its problems. The IMF’s research suggests that a lack of slack in America’s job market has been adding two to three percentage points to annual inflation rates. In Europe, which was more exposed to higher energy prices after Russia’s invasion of Ukraine, the labour market has been looser. The result—high inflation—was the same, but the two regions got there in different ways.
Now that supply chains are pretty much back to normal, these differences are becoming increasingly apparent. They can be witnessed in the medium-term inflation expectations of financial markets. The so-called “five-year, five-year forward” inflation expectation is a favoured measure of central bankers trying to gauge the inflationary temperature. Derived from interest-rate futures contracts, it represents the average inflation rate expected by investors for the five years beginning in five years’ time. In the middle of last year, European and American rates converged. Against a backdrop of high inflation, market participants expected medium-term annual price rises to in time settle at around 2.5% on both sides of the Atlantic. Over the past year, though, rates have diverged sharply, with American medium-term inflation now expected to be notably higher than European inflation (see chart).
American consumer-price inflation fell to 2.4% in September, coming in above projections of a drop to 2.3%. On October 14th Christopher Waller, an influential member of the Federal Reserve’s rate-setting committee, described the data as “disappointing”. By contrast, rate-setters at the European Central Bank are more alarmed by the lack of inflation than its persistence. On October 17th the ECB cut rates for the third time this year; markets now expect a further three reductions by the end of March. At their previous meeting, minutes noted that “the risk of undershooting the target [of 2%] was now becoming non-negligible”. Indeed, the latest reading suggests that euro-zone inflation is today at 1.7%.
Too little, rather than too much, inflation is a problem with which the ECB is unfortunately familiar. Inflation was below 2% for most of the decade before the global upswing in prices that began in 2021. With European growth weakening, Germany in recession and price pressures appearing newly absent, economists at the Macroeconomic Policy Institute, a German think-tank, fear that the ECB mistook a global inflationary surge for a fundamental change in European price dynamics, and raised rates by too much as result. The most recent survey of professional economists by the ECB points to medium-term euro-zone growth of just 1.3% a year, the lowest reading since the survey began.
Hence the divergence. In America a still-tight jobs market is continuing to make reducing inflation difficult; in Europe the old picture of sluggish growth and weak price pressures is once more reasserting itself. The Atlantic is 5,000km and 0.7 percentage points wide. ■
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