Sentences with phrase «inflation leads to higher interest rates»

For example, higher inflation leads to higher interest rates, while lower inflation leads to lower interest rates.

Not exact matches

So that policy response is going to lead to slightly higher inflation in terms of wages and slightly higher interest rates, and the market had to respond to that.

«The benefits of tax reform, global synchronized growth, [and] employment gains will extend the life of our economic expansion and eventually lead to inflation and higher interest rates.

Higher wages can point to higher inflation, which, in turn, could lead the Fed to raise interest rates more aggressHigher wages can point to higher inflation, which, in turn, could lead the Fed to raise interest rates more aggresshigher inflation, which, in turn, could lead the Fed to raise interest rates more aggressively.

It is also possible that a period of very low interest rates will eventually lead to higher inflation for land and construction work, as is normally required to bring forth more supply of a particular good or service.

In January, expensive commodities led to inflation, higher interest rates in developing markets, riots in the Arab world, and lower economic growth.

Under these conditions, there is substantial risk that the additional stimulus from larger deficits will lead to higher inflation and interest rates.

This is because interest rate changes have their largest effect on inflation risk, while stronger macroprudential settings will lead to a higher quality of household indebtedness over time.

While the positives include the unemployment rate falling to 42 - year lows, a weaker pound sterling is leading to a spike in consumer inflation; in the event of a negative outcome in the negotiations with the European Union, the UK currency could slide further, leading to a rise in consumer prices and leaving the Bank of England in a very precarious situation in which easing interest rates will be ruled out due to high inflation, and hiking rates will lead to a slowdown in economic activity.

The selling has raged on in the days since, fueled partly by fear that higher inflation would lead the Fed to accelerate its interest rates hikes and weaken the economy and the stock market.

Proposals for fiscal stimulus via tax cuts, government spending and regulatory reform have led to expectations of stronger economic growth, higher inflation and higher interest rates.

But modest economic growth and rising wages have led to concerns about rising inflation and pushed interest rates higher.

If this selloff is precipitated by higher interest rates, weaker dollar and higher inflation and the Fed decided to start cutting rates that would be a further mess for the U.S dollar and potentially even more inflationary and could lead to even higher long - term interest rates.

We believe that inflation will continue to increase moderately in 2018, which likely will lead to moderately higher interest rates as well.

Historically, fear of high inflation has led the Federal Reserve to step up its short - term interest rate increases.

In addition, to the extent higher realized inflation leads to higher inflation expectations — and in turn, higher interest rates — financial stocks, another big value sector, also benefit.

1980 Bank Crisis to Present Inflation, high interest rates, deregulation and recession created an economic and banking environment in the 1980s that led to the most bank failures in the post-World War II period.

It includes conditions like the one after a high economic growth period leading to high inflation and fears of slowdown, or during uncertain times when the central bank is expected to increase interest rates.

Inflation also leads to higher interest rates, which in turn leads to lower bond prices.

For example, the double - digit inflation of the 1970's was caused by banks keeping interest rates low in an attempt to stimulate a weak economy, at a time when imported inflation from the oil shock was high (leading to stagflation).

This fundamental principle is important because it could lead to a devastating reduction in principle if purchased in a low interest rate high inflation economic environment.

Paul Volcker, the newly appointed Fed chairman, led a sharp shift in Fed policy in October, 1979 which drove interest rates sky high, sent the economy into two back - to - back recessions and knocked inflation out.

As discussed last month, this is a bit of a too much of a good thing crash all around — tax cuts into a strong economy sending inflation and interest rates high enough to lead the Federal Reserve to (potentially) over react and raise rates too high, causing a recession and growing debt issues as the government refinances debt at higher rates, all while a tax cut reduces federal revenues.

Higher inflation leads to higher required interest rates and stocks must therefore be priced more affordably to attract inveHigher inflation leads to higher required interest rates and stocks must therefore be priced more affordably to attract invehigher required interest rates and stocks must therefore be priced more affordably to attract investors.

So, and correct me if I'm mistaken, low interest rates lead to high inflation, which tends to raise bond yields, which then in turn raises interest rates which then leads to lower inflation?

When global interest rates and inflation levels are high there may be an argument for doing something like that as that could reduce inflationary expectations and lead to lower interest rates.

The improving economy, however, will likely lead to higher inflation and interest rates, which will raise the cost of borrowing for consumers and investors.