I think there's more to it than that, but its certainly a factor and the fear factor of further increases may also be in play.Does that not mean that the interest rate rises have worked and that we are heading into a global recession?
Yes, the 7.7% October inflation rate in the US rather than the predicted 8% has had a significant impact on sentiment, with the expectation that the 0.75% December FED interest rate rise that is baked into the market won't happen.I think there's more to it than that, but its certainly a factor and the fear factor of further increases may also be in play.
The shock of the Ukraine war was the cause of many increases especially in fuel/energy (including Coal) and some foodstuffs such as wheat. Most of the world worked together to change fuel supply routes and the reliance on Russian fuel is all but gone at this point with the milder weather around Europe also assisting. Even the 2023/24 winter market predictions of gas returning to $300 have dissipated.
Its the fairly sudden and fairly substantial drop and the fact that its across the board that is surprising as very few were predicting such changes just a few weeks ago.
If the drops are sustained into the end of the year, I think the rhetoric from the central banks will change and that bodes well for mortgage rates.
The October inflation report also showed that month-on-month inflation is slowing significantly in the US. This should mean that the base effect will erode away a lot of inflation as well.Yes, the 7.7% October inflation rate in the US rather than the predicted 8% has had a significant impact on sentiment, with the expectation that the 0.75% December FED interest rate rise that is baked into the market won't happen.
Inflation will, inevitably, fall. Though prices will not, necessarily, fall.
Inflation is comparing the price of something now, to the price of something 12 months ago.
Once the anniversary of the Ukraine war is reached, then inflation will compare the price of things in March/April of 2022 to the price of things in 2023. It was always going to fall, using that calculation.
The interest rate rises were a brainless reaction, caused by brainless economists.
If prices do fall, it will be because of a massive slump in demand, caused by a totally unnecessary recession, engineered by braindead central bankers.
Global debt in the 70's was 100% of global GDP. Now it's 350%. A bit of inflation wouldn't do that any harm.Yes, but it may fall quite a bit quicker than they were forecasting just a few weeks back. That then would see interest rates rise less required and could then have effect of share prices and also see economies avoid recession or at least avoid any deep recession.
If it was up to me I'd ban most biofuels as they have a minimal impact on CO2 and can have a serious environmental and ecoiogical impact.Then there is the issue of reducing fertiliser use through organic farming, production of biofuel , planting large areas with trees again and even solar farms taking acres away from food production.
It's worth pointing out that there are more fat people than hungry people in the world so we already produce too much food, even for the 8 billion of us that there are now.All this points to alot less food being produced, much higher prices and this causing inflation to stay around for a long time. As was pointed out above the full effect of increased cost of food production has still not made it onto the shop shelves
what was the alternative to increasing rates? let inflation run?If prices do fall, it will be because of a massive slump in demand, caused by a totally unnecessary recession, engineered by braindead central bankers.
Inflation kills economies and nations. It is critical that it is controlled. If a manufactured recession is what is required to control it then it's a small price to pay.If prices do fall, it will be because of a massive slump in demand, caused by a totally unnecessary recession, engineered by braindead central bankers.
Inflation kills economies and nations. It is critical that it is controlled. If a manufactured recession is what is required to control it then it's a small price to pay.
Hmmm.Was inflation caused by huge demand? By rapid wage rises? Was it caused by an excess of capital in the economy?
The answer to each of these questions is " No"
Wages have risen below inflation, which has been pretty low, for the last 10 years. So, the capital, if it has expanded is not in the consumer's pocket. In fact, many people's wages are still, in actual terms, lower than they were in 2007/8. In terms of inflation adjustment they are significantly below those levels. The people who have the capital, don't spend it in Centra, or Dunnes Stores, or DID Electric, so they're definitely not causing this inflationHmmm.
All beside the point. Nobody's blaming consumers for inflation.Wages have risen below inflation, which has been pretty low, for the last 10 years. So, the capital, if it has expanded is not in the consumer's pocket. In fact, many people's wages are still, in actual terms, lower than they were in 2007/8. In terms of inflation adjustment they are significantly below those levels. The people who have the capital, don't spend it in Centra, or Dunnes Stores, or DID Electric, so they're definitely not causing this inflation
Yes that's exactly what they are trying to do cause a recession to bring down inflation. That means jobs will be lost in the frothy sections of the economy like tech etc. That means that more people will have to go back to jobs they were doing before like in hospitality and construction . Of course the financial guys are never that explicit but that's the net resultInflation kills economies and nations. It is critical that it is controlled. If a manufactured recession is what is required to control it then it's a small price to pay.
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