The year-on-year CPI grew by 5.3% last month in the world’s leading power, according to analysts, after beating expectations in June and rising 5.4%, the fastest pace since the Great Financial Crisis. The same price index but not including energy or food increased by 4.3%, after another 4.5%.
The debate is complicated. The inflation peak continues and crushes the majority position , or at least official, that it is temporary, that we are actually seeing a slowdown, and that it is conjunctural , product of specific circumstances that are explained by the increase in the price of raw materials, problems in the supply chains of certain industries such as semiconductors or the effect of the recovery itself that begins to uncover contained demand and move excess savings from the pandemic and fiscal and monetary stimuli.
The general CPI continued in July above 5% in the United States, and the underlying, which excludes the most volatile products, at 4.3%, according to estimates that will be tested on Wednesday 11 of August. These are data that, after the records of both indices since 2008, threaten to fuel the risk of tapering (withdrawal of stimuli), which would be fearsome in the market if it definitively advances abruptly, and in August, with liquidity at a minimum of the year due to lower trading.
“With the combination of a solid economic recovery and demand On the one hand, and pandemic-related supply constraints on the other, signs of increased price pressure are increasing, “acknowledges Allianz’s Stefan Scheurer.
Strong increase in interest on US debt and a vacuum effect on the stock markets, with Wall Street at historical highs without being able to avoid suspicions of overbought, are the dramatic events that could be triggered if the Federal Reserve (Fed) loses the control of the story, until now calm and with a vocation to accompany the reconstruction of the onomic, although it is expected to remain the same in the Jackson Hole appointment, even later in the September meeting.
In the same vein, the excellent unemployment data calls for debate in July known this last Friday, which could have continuity in the data of weekly requests for unemployment benefits that will be published on Thursday, with the forecast that they will fall to 375. 000, at the lowest in recent months of economic recovery.
Sophie Altermatt, economist at Julius Baer, ironizes that “there is always something to worry about.” “At present, this ranges from the rapidly spreading Delta variant to reduced monetary stimulus, from slowing growth to rising inflation, and from supply chain problems to Chinese regulatory risk, “adds this expert.
Altermatt believes that” despite the solid backdrop of economic background, the uncertainty about the economic and political prospects continues to be greater than usual. “For this reason, he says, the markets are looking for clues about the future trajectory of monetary policy in the United States, that is, of the next decisions of the Reserve Federal (Fed).
Peak in optimism “After the strong recovery last year, the world economy is now in a more mature phase of the growth cycle; in other words, the signs of an imminent peak of economic optimism have increased, “considers Stefan Scheurer of Allianz Global Investors.” While China’s economic momentum has been slowing since the beginning of the year, the growth dynamics of The United States reaches its peak in the second quarter, and in Europe and on a global scale, in the third quarter “, he continues.
The second reading of the data for July inflation in Germany, which in its first publication marked an increase of 3.8% for the general price index, with the expectation that the Zew Institute investor confidence indicator will relax until 55 points on Tuesday, from 63, July 3 integers.
“Market participants remain concerned about inflation higher than expected followed by an early adjustment of world monetary policy; For this reason, it is probable that the economic recovery will be affected and that the volatility of the markets will increase “, influences Stefan Scheurer.” Lower interest rates [en la eurozona vienen retrocendiendo en las últimas semanas] reflect a market insecure about how easy normalization can now be after years of easy money, “the team of analysts at BofA Global Research concludes in a recent report.
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