The Brazilian economy has experienced in the past, and may continue to experience, periods
of high inflation rates and political unrest.
Five drivers
of higher inflation rates are now starting to kick in.
... the three - year rally in bonds could be officially O - V - E-R because
of higher inflation rates.
Not exact matches
The change is key as Fed officials consider 2 percent to be a healthy level
of inflation and a key for continuing to push
rates higher.
Investors often use gold as a hedge against
inflation, but
higher interest
rates dent the appeal
of gold, which earns nothing and costs money to store and insure.
That would boost economic growth,
inflation and debt: if the Joy
of Cooking contained a recipe for
higher interest
rates, that would be it.
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.
«I can at most venture a personal judgment, based on some examination
of the historical evidence, that the initial effects [on employment]
of a
higher and unanticipated
rate of inflation last for something like two to five years; that this initial effect then begins to be reversed; and that a full adjustment to the new
rate of inflation takes about as long for employment as for interest
rates, say, a couple
of decades.»
After the U.S. experience during the Great Depression, and after
inflation and rising interest
rates in the 1970s and disinflation and falling interest
rates in the 1980s, I thought the fallacy
of identifying tight money with
high interest
rates and easy money with low interest
rates was dead.
As they won wage increases
higher than the current
rate of inflation they would, for a short time, gain real wage increases.
(Bond yields move inversely with bond prices, and rising yields tend to signal expectations
of higher growth and
inflation ahead and, therefore,
higher interest
rates.)
«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.
In other words, would pushing the short - term interest
rate down to 0 percent, from the current
rate of 0.16 percent, propel the GDP growth and
inflation to such permanently
higher levels?
With no signs
of creeping
inflation, it doesn't hurt for the Fed to keep the pedal on the monetary metal, while removing stimulus too early could risk forcing interest
rates and the dollar unnecessarily
higher, putting a damper on the recovery.
The beginning
of his tenure has been defined by ramped up market volatility, a pickup in
rates and the consensus that
inflation is ticking
higher after a prolonged period
of price suppression.
We have no corporate solution to this problem;
high inflation rates will not help us earn
higher rates of return on equity.»
That's bad compared with the U.S. and the European Union, where the
rates of inflation are 2.7 percent and 3.1 percent, respectively, but economists not affiliated with the government say the real figure is at least twice as
high.
According to a 2005 study
of criminal patterns by Statistics Canada, for example,
inflation rates influence the levels
of financially motivated crimes such as break - ins and car thefts, while increases in unemployment correlate with
higher homicide
rates.
High interest
rates,
of course, can compensate purchasers for the
inflation risk they face with currency - based investments — and indeed,
rates in the early 1980s did that job nicely.
Bets the European Central Bank might consider raising interest
rates by the end
of 2018 due to evidence
of higher inflation and business activity in the euro have lifted the euro, which was poised for its best yearly performance versus the greenback in 14 years.
The U.K. had been expected to follow close behind the Federal Reserve in raising interest
rates for the first time in nearly a decade, but with lower commodity prices and weak wage growth still keeping a lid on
inflation, economists now think that the U.K. may not raise
rates till 2017 — even though new data out Wednesday showed the employment
rate hit a 45 - year
high of 74 % in the three months to November.
«Employment
rates for Darden graduates are
high [94 % for the class
of 2014] and the average starting salary is up 12 % since 2010, well ahead
of inflation.»
«
High wage
inflation data in the months ahead could cause a rapid reappraisal
of the pace
of Fed
rate hikes.
Volatility has come back with a vengeance recently as worries
of rising
inflation sent interest
rates higher, rattling investors.
Take a look at the top 10
highest - grossing R -
rated movies
of all time adjusted for
inflation (to keep things on an even playing field):
For the first time since oil prices crashed, strong job growth has the Bank
of Canada worried about
inflation, meaning
higher interest
rates are coming
Wednesday's moves come after three volatile sessions in which fear
of rising
inflation sent interest
rates higher, pressuring equities.
«I don't think
inflation will do much harm to the economy and to my business, but the
high - interest -
rate policy that I anticipate the Bank
of Canada will follow will do significant harm to both.»
Yet while the Fed has eased policy to lower joblessness and raise
inflation in the wake
of the 2007 - 2009 recession, central banks such as the BoE have also launched accommodative bond - buying programs despite
higher - than - desired
inflation rates.
One can see that the
highest rates of money growth and
inflation are clearly in the emerging markets, and not in the developed markets.
Economists doubt the jobless
rate can fall that low again without touching off
inflation, as employers are forced to offer
higher pay to attract workers from a dwindling supply
of unemployed.
The fuel price increases will filter through the economy, said McTeague, leading to less discretionary spending,
higher inflation rates and fuel premium increases for truck, rail and air transport
of goods.
Those concerns triggered a bout
of financial market turmoil, as investors feared
higher interest
rates were coming to keep
inflation in check.
But some economists are wondering if a
higher rate of inflation is really so bad.
The situation can quickly spiral out
of control, resulting in
higher interest
rates and runaway
inflation.
We believe that the downside risk is that the economy enters a period
of «overheating» characterized by rising
inflation and
higher interest
rates.
Real interest
rates, which subtract
inflation from the nominal
rate to show the true cost
of borrowing, soared as
high as 8 % in the aftermath, as demand for goods and services evaporated and prices tumbled.
We are in the ninth year
of an unusually long economic expansion, and while we believe the cycle has room to run, we see gradually rising
rates and modestly
higher inflation ahead.
So, the government could actually spend gazillions
of dollars and set its
rates at 0 % permanently (which might cause
high inflation, but you get the message).
The stock market opened way down, continuing last Friday's selloff, though it has climbed back since the open — implying the return
of volatility — as skittish investors continue to fear the sequence I describe in this AM's WaPo: tight labor market, wage pressures,
higher interest
rates,
inflation, lower profit margins.
Finally, in a nominal GDP targeting regime, a decline in r - star caused by slower trend growth automatically leads to a
higher rate of trend
inflation, providing a larger buffer to respond to economic downturns.
In recent years the dollar has had an
inflation rate of around 2 percent, and it has been
higher in the past.
Not suddenly, but over time, gradually
higher rates of inflation should be the result
of QE policies and zero bound yields that were initiated in late 2008 and which will likely continue for years to come.
Although some are concerned about potential
inflation and
higher interest
rates, we still enjoy an environment
of synchronized global economic growth and muted macro risks.
Dividend Growth Investing is an income strategy
of investing in companies that have a barrier to entry (large moat) and consistent history
of increasing dividends by a
rate higher than
inflation.
Because nominal wage growth for a large fraction
of workers has been held to zero, a somewhat
higher rate of inflation would grease the wheels
of the labor market by allowing real wages to fall (Akerlof, Dickens, and Perry 1996).
Of course, this approach would need to balance the purported benefits against the costs and challenges of achieving and maintaining a somewhat higher inflation rat
Of course, this approach would need to balance the purported benefits against the costs and challenges
of achieving and maintaining a somewhat higher inflation rat
of achieving and maintaining a somewhat
higher inflation rate.
Many emerging markets are caught between
high food and energy
inflation and the threat
of higher interest
rates.
Bond investors are in constant fear
of a replay
of the 1970s when interest
rates exploded
higher in concert with sky
high inflation, a double whammy
of bad news for fixed income securities.
To expect the Fed to hold
rates at current levels or just a quarter - point
higher, in the face
of those
inflation figures, would seem to be asking a lot.