Sentences with phrase «persistent inflation pressures»

Even if we do observe economic weakness, it's not likely in my view that the Fed will have much leeway to cut rates, due to persistent inflation pressures (which have historically been associated with profligate government spending of precisely the sort that has been revived in the past few years).

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.

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.

In short, despite persistent inflation pressures, the Fed can't easily raise rates further because that might add to the instability in the housing sector.

Not exact matches

All of this matters because persistent excess capacity puts downward pressure on inflation, raising the risk that we will continue to fall short of our inflation target.

Even wage growth (which operates with a lag) is starting to move higher while underlying inflation pressures remain persistent.