Bond indexes have declined this year, as the growing economy has led the Fed to raise interest rates and investors have grown increasingly concerned about the potential
for accelerating inflation.
Experts are in consensus the U.S. economy is headed
for accelerated inflation, which will drive up housing prices, along with all other living expenses, making it harder for prospective homebuyers to save for their down payment.
Not exact matches
The Fed's announcement assuaged investors» concerns about the possibility of
accelerated interest - rate increases as rising materials costs
for companies have signaled a pickup in
inflation.
Experts, however, had been anticipating
inflation to
accelerate at an even faster pace in March and, earlier this week, the Bank of Canada raised its
inflation projections
for 2018.
«Now, even if
inflation does
accelerate over the remainder of the year, there's still reason
for the bank to be cautious on future rate hikes.»
The U.S. economy probably added 185,000 jobs in March while wage gains
accelerated, a survey of economists showed, reinforcing the Federal Reserve's case
for continuing to increase interest rates gradually to keep
inflation from overheating while keeping unemployment low.
For one thing, further stimulus will continue to increase the amount of money in the economy, which is not causing
inflation at the moment but could become inflationary when the economy does
accelerate.
In other signs of stabilization, China's exports rose
for the first time in four months in June, while consumer
inflation accelerated.
He suggested this might add to
inflation risks;
accelerate the need
for interest - rate hikes; strain mortgages; and ultimately widen the import - export trade deficit, which is the source of trade tensions.
If the Fed were to continue hiking rates based on the current low rate of productivity growth
for fear that
inflation would
accelerate, that would tend to keep productivity growth permanently depressed by preventing wage pressures from pushing businesses to investment in productivity boosting technologies.
Our experts discuss the market perception vs. reality that
inflation is
accelerating, the supply of US treasuries and the impact of repatriation, and the demand
for short term debt.
But analysts will watch the official statement after the meeting
for signs of rising concern about
inflation, and hints that the Fed might
accelerate its pace of rate increases later this year.
Investors have begun to worry that the Fed might
accelerate the pace of its credit tightening if
inflation, which has been dormant
for years, starts to show signs of
accelerating.
And
for all the muddle, the one thing that seems clear is that the risks to the economy and particularly the labor market — which is generating solid job growth and even some wage gains (
for which we should all give Chair Yellen and the Fed serious credit)-- remain «asymmetric:» there's a greater risk of needlessly slowing non-inflationary growth than there is of
inflation accelerating.
However resilient the US economy, the slowdown being experienced in Asia and Latin America may force the Fed to lower its growth outlook (in June, the central bank announced a reduction in its so - called «central tendency
for growth» through 2017) and could dent confidence that
inflation will
accelerate toward the Fed's target within a reasonable time frame.
BEIJING (AP)-- China's
inflation accelerated to 2.3 percent in February, driven by a jump in food prices, but fell below the government's official target
for the year.
Unless these new policies are implemented,
inflation sharply
accelerates, or euphoria in markets breaks out, there is no case
for the Fed to adjust policy interest rates.
The Fed doesn't see any signs of
inflation accelerating, which would be good news
for investors given the projections
for a strong economic backdrop.
The Bank of Japan expanded monetary stimulus on July 29 through a modest increase in purchases of exchange - traded funds (ETF), yielding to pressure from the government and financial markets
for bolder action to spur growth and
accelerate inflation towards its 2 percent target.
The thesis is that the global economy has shifted into high - growth mode and therefore the demand
for commodities will rebound as
inflation finally begins to take hold and central banks
accelerate interest rate hikes.
The main way to get
inflation is
for velocity to
accelerate in an environment of rapid money growth.
Given equities are better than futures
for inflation protection, after the roll yield is included, and that small - caps and mid-caps have done best with
accelerating growth, the falling dollar and rising
inflation, perhaps the strategy might be to underweight large caps.
This should inevitably benefit oil and gas demand & prices — whether it reflects a liquidity phenomenon, a dollar depreciation,
accelerating inflation, and / or simply a scramble
for real assets.
As the
inflation rate is likely
accelerating due to rising energy costs working their way through the economy, this feature is an important consideration
for fixed income investing.
Inflation, which has been mysteriously low
for years, has
accelerated in recent months, with expectations hovering near the highest level since 2014.
The FNB House Price Index revealed a 7.4 % year - on - year national growth
for the month of June, which was slightly higher than the 7.2 % rate recorded
for May, «extending the recent mild
accelerating trend in average house price
inflation to 5 months».
If that acreage isn't cared
for, we'll see production decrease and we'll have a lingering impact next year or the year after that and we could be dealing with several years of
accelerated food price
inflation — especially if the drought persists.
However, the stage is set
for inflation to
accelerate due to tightening labor market conditions, higher oil and energy prices, and rising home prices and apartment rents.