Money seems stable enough in the short - run, but every now and then it fails due to hyperinflation, or the slow steady failure in the store of value sense
of moderate inflation over long periods.
CAMBRIDGE — It is time for the world's major central banks to acknowledge that a sudden burst
of moderate inflation would be extremely helpful in unwinding today's epic debt morass.
Not exact matches
Forget
inflation fears — Federated sees earnings as the market story
of year Fed's Quarles says it's been «quite some time» since the economy looked this good Fed sees economy past full employment but with only «
moderate» wage gains
The OECD noted that «short - term
inflation expectations appear to be inching upwards,» and said that the Bank
of Canada, which has kept interest rates to promote economic growth, «should soon resume tightening at a
moderate pace.»
While
moderate inflation generally supports equity investors, rapid
inflation, or fear
of it, could prompt the Federal Reserve to hike rates faster, undermining the attraction
of equities.
If
inflation moderates, if it doesn't spike quite as much as we're thinking it will do, I think a lot
of businesses will feel they have a little bit more room to maneuver and indeed to get ahead,» he explained.
So far, the decline in major commodity prices has been fairly modest, though enough to help rates
of CPI
inflation to
moderate a little.
In particular, to the extent that the effect on
inflation of further gradual tightening in labor market conditions is likely to be
moderate and gradual, the case to tighten policy preemptively is less compelling.
They will need to cope with increasing drag from the advanced economies and
moderating growth in the emerging markets, shifting risk preferences on the part
of investors and a surge in
inflation that has brought headline rates well above targets globally.
Core
inflation has been lower than expected in recent months... Core
inflation is expected to increase gradually over coming quarters, reaching 2 per cent by the middle
of 2013 as the economy gradually absorbs the current small degree
of slack, the growth
of labour compensation remains
moderate and
inflation expectations stay well anchored.
In fact I have always argued that I consider a
moderate amount
of sustained CPI
inflation as a good thing, indicating that China is really rebalancing.
These risks include the downside ones
of a Chinese yuan devaluation and a U.K. exit from the European Union, as well as the upside risks
of an emerging market rebound or a
moderate rise in
inflation expectations on improving growth prospects.
The price increase was also driven by the reality that seafood
inflation, although
moderated from where it was at the beginning
of the year, was still elevated.
Actually, the Bank
of Canada
moderated wages from 1980 to 1995 with
inflation - fighting interest - rate hikes.
Euro zone
inflation eased in June because
of more
moderate energy price rises, but the slowdown was less than expected by markets and the core measure
of price growth the ECB keenly watches increased by more than anticipated.
Treasury Secretary Steven Mnuchin did his best Friday morning to remind America
of how well the economy is doing, touting «higher growth,
moderate inflation, lower unemployment.»
Most
of the returns should come from maintaining pricing against
inflation,
moderate product innovation, dividends, and buying back shares.
Overall, however, the bulk
of the evidence continues to suggest tepid economic growth with
moderate but persistent
inflation pressures, and the Market Climate for precious metals remains favorable on our measures.
These relatively
moderate outcomes have been an important restraining influence on overall
inflation during the past year, and they also point to the prospect
of continued employment growth and lower unemployment.
Even so, as
inflation stabilises at a low rate
of increase I expect real GDP growth to resume a
moderate upward path.
All in all, the Fed continues to expect
inflation to rise gradually toward 2 % over the medium term as the labor market improves further and the transitory effects
of energy price declines and other factors dissipate, but the pace for hikes in interest rates could well be
moderate, as the Fed has been indicating.
As usual, I don't place too much emphasis on this sort
of forecast, but to the extent that I make any comments at all about the outlook for 2006, the bottom line is this: 1) we can't rule out modest potential for stock appreciation, which would require the maintenance or expansion
of already high price / peak earnings multiples; 2) we also should recognize an uncomfortably large potential for market losses, particularly given that the current bull market has now outlived the median and average bull, yet at higher valuations than most bulls have achieved, a flat yield curve with rising interest rate pressures, an extended period
of internal divergence as measured by breadth and other market action, and complacency at best and excessive bullishness at worst, as measured by various sentiment indicators; 3) there is a
moderate but still not compelling risk
of an oncoming recession, which would become more
of a factor if we observe a substantial widening
of credit spreads and weakness in the ISM Purchasing Managers Index in the months ahead, and; 4) there remains substantial potential for U.S. dollar weakness coupled with «unexpectedly» persistent
inflation pressures, particularly if we do observe economic weakness.
As a general rule, countries attempt to keep
inflation fixed at a rate
of 2 percent as
moderate levels
of inflation are acceptable, with high levels
of deflation leading to economic stagnation.
Some economists have argued, for example, that if a central bank keeps real interest rates low (but positive) over the long term and allows for
moderate inflation, a country with its own currency can increase spending very substantially over the long term without increasing taxes. PEF Blogger, Arun Dubois, has blogged extensively about some
of these other perspectives.
During these past 15 years, the Anglo - American economies (US, UK and Canada) have experienced episodes
of weak growth in broad money (M2 or M3) with
moderate inflation (in the early - 1990s) and episodes
of strong monetary growth with little measured
inflation of consumer prices, as now.
But a period
of more
moderate growth would be a better outcome than either allowing
inflation to go unchecked or expecting the major economies to do all the heavy lifting.
Producer price
inflation also
moderated over the year, particularly at the earlier stages
of production (Graph 70), even though the effect
of movements in oil prices was fairly small over this period.
Indicators
of upstream price pressures, such as producer price data and business surveys, continue to suggest
moderate rates
of inflation.
This path is predicated on the assumption that even as the labor market reaches full employment, the pace
of economic growth will remain
moderate, and
inflation will not reach the Fed's 2 % target before end - 2017.
The idea is that there is some
moderate, positive rate
of inflation that produces the lowest minimum unemployment rate that can be sustained without accelerating
inflation.
By enshrining zero percent
inflation as the ideal, both
of them reflect an exaggerated fear
of even
moderate inflation that is not supported by the preponderance
of evidence.
Second, by arbitrarily truncating the distribution at an
inflation rate
of 50 percent, it makes the scores
of countries with
moderate inflation look worse than they otherwise would.
The net effect
of higher import prices and continued subdued domestic inflationary pressures is likely to be a
moderate rise in
inflation during the period in which import prices are adjusting.
This procedure exaggerates the harm done by
moderate rates
of inflation in three ways.
Low
Inflation Risk: Bitcoin is gradually minted at decreasing fixed rates, creating a
moderate and favorable amount
of deflation for as long as new bitcoins are mined.
If ending Federal stimulus
moderates the pace
of economic growth,
inflation fears will ease and long - term interest rates will edge back down, Hunt says.
Despite a small decline in May, consumer confidence for the first five months
of 2015 has been at a higher average level than at any time since May 2004.2 A relatively low unemployment rate and
moderate inflation have helped maintain consumers» upbeat mood.
The requirements for a
moderate budget had risen $ 1,200 in one year because
of inflation.
«If Congress ends up halfway between House and Senate, then we're looking at
moderate increases, a bit ahead
of the rate
of inflation relative to fiscal 2016,» said Hourihan.
In judging when to
moderate the pace
of asset purchases, the Committee will, at its coming meetings, assess whether incoming information continues to support the Committee's expectation
of ongoing improvement in labor market conditions and
inflation moving back toward its longer - run objective.
Alternatively, if the next few years include both the effects and the reversal
of the recent emergency fiscal and monetary stimulus - call it the Great Unwinding -
inflation volatility could move above average, leading to more
moderate valuations for the S&P.
When the motor is run steadily at a
moderate power level, most
of what determines the boat's net rate
of progress upstream (real returns) is the velocity
of the opposing water currents (
inflation), not the output
of the motor (nominal returns).
Today's investors demand some signs
of economic growth and
moderate inflation before committing wholeheartedly to a region.
«The Committee expects that... economic activity will expand at a
moderate pace, labor market conditions will strengthen somewhat further, and
inflation will stabilize around 2 percent over the medium term... In view
of realized and expected labor market conditions and
inflation, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent.»
However, using the Bank
of Canada posted rate as a benchmark is excessive in our view, as an overnight 2 percentage point increase in mortgage rates is unlikely given the low
inflation rate and
moderate growth in Canada.
If the economy stays on its current track
of moderate growth, with an improving job market and low
inflation, the stock market rally could get back on track.
has a relatively
moderate level
of risk in seeking to support an annual withdrawal strategy to address anticipated,
inflation - sensitive income needs.
Nonetheless, they give a rough estimate
of how stock diversification can
moderate negative
inflation betas.
After
moderating this quarter, the Bank reported the total CPI
inflation, along with core
inflation, to be around 2 percent over the balance
of the projection horizon.
Inflation rates are expected to stay anchored as the growth
of labour compensation remains
moderate and the economy reaches its production potential.