Posts Tagged ‘European Inflation’
Insignificant Inflation
With the Fed’s preferred inflation gauge currently running at 1.6% year-over-year, well below the Fed’s 2% long-run target, real personal income growth flat, real household spending declining by 0.1% in July, and inflation in Europe at a staggeringly low 0.3% year-over-year and falling, don’t waste your energy getting worked–up about inflation. Moreover, GDP growth in…
Read MoreInterest in Inflation
With year-over-year inflation in Europe running at just 0.7%, and core inflation at a record low of 0.8%, the European Central Bank should seriously consider an interest rate cut at their meeting this Thursday. While it won’t improve weak bank lending, it would weaken the overvalued euro, boosting exports. It’s better to prevent deflation because…
Read MoreECB Wrongly Raises Rates
The ECB hiked its main interest rate to 1.25% from 1%, yet inflationary pressures and growth prospects are no different in Europe than in the US and UK and they are not raising. This decision marks the moment when differences in analysis and not divergent economic circumstances, affect policy decisions. This decision will hurt the…
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