[ad_1]
How will the Fed respond to the surge in US inflation?
After the release of the data last week, the Fed is facing new pressure to tighten and ultra-loose monetary policy. display In the 12 months to April, US consumer prices rose at the fastest rate since 2008, exceeding economists’ expectations.
Prior to the release of the minutes of the latest central bank meeting on Wednesday, inflation soared, which will provide investors with more detailed information about the Fed’s plan to guide the country’s recovery from the pandemic.
Chairman Jay Powell (Jay Powell) Reiterate After the policymakers’ meeting in late April, the Fed is still “a long way from withdrawing any monetary support.” In addition, he and other committee members have made it clear that they will allow inflation to temporarily exceed the central bank’s long-term target of 2%.
Kari Montanus, senior investment manager at Columbia Threadneedle, said: “They have always insisted that they expect inflation to be temporary.” “But any indication that they are starting to see it may not be just a temporary change. I think everyone is looking for [that]. “
One of the key indicators used by the Fed to track the country’s recovery health is the level of employment in the United States. Disappointing figures for April Expectations of the imminent reduction of currency support are limited. Analysts said the surge in inflation last week will stimulate these discussions in the central bank.
Brian Jacobsen, senior investment strategist at Wells Fargo Asset Management, said: “This has become a division of the Fed.”
“Until now, the whole pandemic seems to come from the same hymn… It’s always too early to talk about tapering. Well, now some of them want to have a conversation.” Aziza Kasumov
Can the euro continue to rise against the dollar?
Since the beginning of April, the euro has risen by nearly 3.5% against the dollar due to the accelerated vaccination campaign in Europe, the reduced likelihood of a lockdown, and the optimistic economic outlook. Analysts said the April inflation data released on Wednesday may make it climb further.
After the turbulent first quarter of Europe sank, the recent uptrend of the single currency marked its recovery. Vaccine confusion, Coronavirus cases have surged, and the scope of restrictions has expanded.In contrast, the European Commission last week improve Its economic forecast for the euro area predicts that the euro area will grow by 4.3% this year and 4.4% in 2022.
The increase in inflation in April may be one of the strongest signs that the region’s recovery is gaining momentum. This will also prompt investors to become more bullish on its currency, which was as high as $1.2172 in early May and then closed at just over $1.21 on Friday.
“[The data] Goldman Sachs (Goldman Sachs) analysts said: “This will help alleviate the market’s continued concerns about a rebound in Europe, which will lead to a further appreciation of the euro to $1.25.”
Eurozone inflation rate reached Highest level Since the beginning of the pandemic in March. However, this growth is mainly driven by one-off factors such as increased energy costs. Some analysts said that further gains in April may cause the European Central Bank to slow down bond purchases at its June policy meeting.
In the minutes of the last policy meeting in April released on Friday, the ECB policymakers Say Growth and inflation in the Eurozone are now more likely to exceed expectations.
“Further inflation in the Eurozone will test the European Central Bank… Bank of America analysts wrote in a research report last week: “Provide hawks with ammunition to further reduce the need for taper. ” Eva Szalay
How hard was the Japanese economy hit in the first quarter?
Japan’s continued efforts to respond to the coronavirus pandemic has led investors to question its economic performance in the first quarter and beyond.
This year alone, it declared two states of emergency in some of the largest cities: One From the beginning of January, it was originally scheduled to end in February, but it was later extended to March, and other It started in late April and lasted until the end of May.
According to a Bloomberg survey of economists, preliminary GDP figures released on Tuesday are expected to fall 1.2% from the previous quarter, and a 4.6% annual rate decline.
However, Masamichi Adachi, chief economist at UBS in Tokyo, believes that forecasters overestimate changes in consumer behavior. He said: “I expect the annualized rate of return to be only negative 1.5%,” referring to Japan’s preferred GDP indicator.
“even if [most recent] In the state of emergency, the mobility of personnel did not drop too much. On the other hand, this is why the number of new infections is declining slowly,” he added.
Japan’s economic development is in sharp contrast with that of the United States. The US economy has benefited from the rapid introduction of vaccines, declining cases, and a large number of fiscal stimulus measures, and plans to introduce another big plan.
At the same time, in a state of emergency in major cities in Japan, lazy Vaccination programs and rising infection rates have hit consumer spending and led to widespread expectations that production will decline after growth resumes in the third and fourth quarters of last year. Robin Harding
[ad_2]
Source link