He discerns an inflationary pressure not seen since the 1970s.
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This inflationary pressure typically meets with one of two responses.
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The Federal Reserve, fearing inflationary pressure, would raise interest rates.
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THERE'S NO INFLATIONARY PRESSURE FROM THAT, ALRIGHT, IF THAT'S THE CASE.
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That doesn't scream inflationary pressure, but it's going the right way.
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Trade policy risks also add to the inflationary pressure in commodities.
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The move may create inflationary pressure, Indonesia's central bank said on Friday.
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Economists say the higher rates should be enough to curb inflationary pressure.
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Inflationary pressure will also put the fixed income market at risk, Lebovitz said.
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He said sterling's weakness might mean some inflationary pressure in the food market.
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Panelists pointed to higher steel costs as a key source of inflationary pressure.
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Average hourly earnings came in just shy of expectations, indicating muted inflationary pressure.
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Mr. Powell also said that the Fed sees little sign of inflationary pressure.
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Potential growth—the economy's capacity to grow without inflationary pressure—is only around 3%.
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However, average hourly earnings came in just shy of expectations, indicating muted inflationary pressure.
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The absence of stronger inflationary pressure has been a little bruising for the Fed.
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"It does not appear that undue inflationary pressure is building so far," Bullard said.
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The central bank believes higher economic growth will not increase inflationary pressure, Nabiullina said.
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Ultimately, the rise of inflationary pressure will force the Fed to induce a recession.
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The BoE has said it expects wages will rise more quickly and increase inflationary pressure.
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However, average hourly earnings came in just shy of expectations, pointing to muted inflationary pressure.
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When a positive output gap expands, it is a sign that inflationary pressure is building.
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That's an extremely powerful inflationary pressure on insurance costs any way you look at it.
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Economists expect it to start cutting the rates in coming months as inflationary pressure ease.
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The central bank raised interest rates by 50 basis points in December, citing inflationary pressure.
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Still, its message of restraint and concern about weak inflationary pressure caught some investors off guard.
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But with inflationary pressure still subdued across the euro zone, policymakers may not be too exercised.
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He also said that any huge salary increases for public workers would add to inflationary pressure.
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Pressure to raise wages during expansions will inevitably be seen as precursors to insidious inflationary pressure.
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Still, its message of restraint and concern about weak inflationary pressure caught some investors off guard.
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Analysts said rising inflationary pressure is limiting the room for the central bank to cut rates.
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But market expectations of a rate cut were not swayed by the evidence of some inflationary pressure.
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Rising rates were creating inflationary pressure, a technology boom was underway and the U.S. dollar was strengthening.
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The decrease came after the country raised interest rates by 50 basis points in December citing inflationary pressure.
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Rising pump prices are already adding to inflationary pressure and are strengthening the case for a rate hike.
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With many labour markets tight, central bankers are more likely to be spooked by oil-driven inflationary pressure.
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It said interest rates would be kept at a level ensuring demand for loans without increasing inflationary pressure.
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This could give the central bank leeway to raise interest rates as it grapples with rising inflationary pressure.
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"We are not seeing undue inflationary pressure in the labor market, so our policy remains accommodative," Yellen said.
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But it did not refer to inflationary pressure as a risk and said that price pressures had abated.
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There has been, however, inflationary pressure elsewhere, particularly in prices of risky assets like stocks and corporate bonds.
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Although a welcome development for workers, economists often view rising wages as an early indication of inflationary pressure.
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There was little sign of inflationary pressure, with retail prices rising a modest 0.5% in the December quarter.
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"The biggest inflationary pressure comes from faster increase in labor costs in comparison with productivity growth," she said.
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He has said the Fed will not respond to wage growth as a sufficient sign of inflationary pressure.
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"All this should mean less inflationary pressure, lacklustre economic growth, and little upward pressure on interest rates," he concluded.
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A growing positive output gap shows that inflationary pressure is building and thus an important indicator for central banks.
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Noting sluggish economic growth and mild inflationary pressure, the BOK said it would maintain its accommodative monetary policy stance.
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Growth has yet to be sustained and broad-based while there is no concern about inflationary pressure, he added.
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Excluding this component, producer prices fell 0.1% on the month in a new sign of persistently weak inflationary pressure.
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"Inflationary pressure remains weak for items like machinery," he said, adding that wholesale inflation will likely peak around October.
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He thinks the deliberate mention of higher inflationary pressure means the central bank is raising expectations of a March hike.
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Inflationary pressure has eased partly because of a rebound in the rouble, helped by the recovery in global oil prices.
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Lack of clear inflationary pressure enables policymakers to prioritise sustaining growth over controlling prices and justifies the interest rate reduction.
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It is true that Janet Yellen, the Fed's chair, emphasises the labour market in her assessment of future inflationary pressure.
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If the tax was applied, Bank Indonesia said, there would be additional inflationary pressure lasting for two to three months.
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Carter's grain embargo inaugurated a bad period for America's farmers, as we suffered from low prices, inflationary pressure, and more.
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China has also continued to pump more money into its financial system to support growth, adding to potential inflationary pressure.
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The bank said it expected its monetary policy to remain "expansionary" in the coming period due to low inflationary pressure.
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Ultimately, by ... 4Q, it is likely that growth will be higher than potential and signs of inflationary pressure will return.
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But tariffs could create some inflationary pressure and account for 0.2 percnet of the expected acceleration of in inflation in 2019.
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But over the past decade that trade-off has rarely been a vexed choice, because inflationary pressure has stayed oddly low.
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"Continued inflationary pressure (and rising inflationary expectations) needs to be checked," the State Bank of Pakistan (SBP) said in a statement.
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New signs of subdued inflationary pressure in the euro zone bolstered expectations of a cautious stance from the European Central Bank.
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Simsek also said the exchange rate was causing inflationary pressure, but the inflation would fall to single digits sooner or later.
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ALMATY, Sept 9 (Reuters) - Kazakhstan's central bank raised its policy rate to 9.25% from 9.00% on Monday, citing increased inflationary pressure.
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"Rising inflationary pressure and weak external balances — due to lower exports — would add depreciatory pressure on the region's currencies," Phiri said.
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The central bank said inflation was outside its band of 6% to 9% and that it wanted to curtail inflationary pressure.
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The central bank's latest meeting minutes showed some members hesitant about the December hike given a lack of more robust inflationary pressure.
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Global stock markets staged a strong rebound since a brutal sell-off that began late January on worries about rising inflationary pressure.
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"The recent weakening of the rouble is exerting pro-inflationary pressure and causes inflation expectations to grow," its statement on Friday read.
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But now, the dollar has climbed amid rising U.S. interest rates and expectations President-elect Donald Trump's policies will spur inflationary pressure.
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Inflationary pressure in the sector softened despite an expected increase in value-added tax next year to 20 percent from 18 percent.
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The survey also showed little inflationary pressure with retail prices edging lower in the three months to March and labor costs moderating.
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The increased inflationary pressure of public borrowing will cost you more in every gallon of gas, loaf of bread and new loan.
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In a statement, the bank's executive board cited low inflationary pressure in the country and abroad mainly due to lower oil prices.
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Average wage earnings, seen as a key factor in gauging the strength of any inflationary pressure, are expected to rise 0.2 percent.
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Sri Lanka's central bank unexpectedly raised its key policy interest rates on Friday from a record low, to prevent demand-driven inflationary pressure.
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President Donald Trump is depending on Saudi Arabia to hike its oil output to offset his Iran policy's inflationary pressure on oil prices.
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U.S. PCE inflation data due at 1230 GMT could further fan expectations of an early rate move if it shows increasing inflationary pressure.
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Lee Jae-hyung, an economist at Yuanta Securities Korea said the growing inflationary pressure allows the BOK more room to delay any cuts.
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A slowdown in labour force expansion would reduce UK productive potential growth, implying more inflationary pressure for any given growth in aggregate demand.
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T, with the lower reflecting global central bank easing and a lack of inflationary pressure to push the Fed to raise rates faster.
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"The monetary policy committee's further decisions will depend on how quickly inflationary pressure will be eliminated," the bank said in a statement on Wednesday.
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But gold has recovered from a low hit in mid-August, spurred by concerns over economic growth and inflationary pressure from soaring oil prices.
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"As such, the labor market is unlikely to generate much inflationary pressure for the foreseeable future," said Paul Dales, chief economist at Capital Economics.
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The Fed has cited a lack of inflationary pressure as one of the reasons it has felt comfortable pausing its interest-rate hiking cycle.
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It's just that, typically, it takes several years for imbalances to build in the economy, triggering inflationary pressure and forcing the Fed to act.
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Bond yields dropped as a boost from the trade deal failed to offset low U.S. producer price data, which highlighted persistently low inflationary pressure.
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Classic economic theory says that since between $3 trillion and $4 trillion were printed, those dollars should create great inflationary pressure as conditions improve.
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The remaining workers in those industries could demand higher pay, which is good news for them, but it would also contribute to inflationary pressure.
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"There is no inflationary pressure coming from the labor side," said Sung Won Sohn, an economics professor at Loyola Marymount University in Los Angeles.
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The miner said its EBITDA fell due to factors including lower revenue, inflationary pressure on costs, and higher distribution costs driven by larger export volumes.
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Bond yields have headed higher as investors try to front-run both wage and inflationary pressure from stronger growth and a newly hawkish Federal Reserve.
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" ON ECONOMY "We maintain our view on economic growth... economic (growth) is close to its potential and its growth does not create additional inflationary pressure.
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"Moreover, monetary policy is still very loose and with inflationary pressure, especially wages, still muted, the ECB is unlikely to tighten policy aggressively," he added.
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Nordea economist Dmitry Savchenko said Russia's decision to ease an embargo on food products from Turkey was one factor likely to help ease inflationary pressure.
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Second, even the moderate pickup in wage growth to date might encourage firms to invest more, lifting productivity out of the doldrums and dampening inflationary pressure.
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ZAMBIA - The central bank in Lusaka raised the benchmark lending rate to 10.25% from 9.75% on May 22 to counter inflationary pressure and support macroeconomic stability.
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The central bank unexpectedly raised its key policy interest rates by 50 basis points on Friday from a record low, to prevent demand-driven inflationary pressure.
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TOKYO (Reuters) - Bank of Japan Deputy Governor Masazumi Wakatabe said on Friday that data released earlier on consumer prices for February showed inflationary pressure is insufficient.
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ZAMBIA - The central bank in Lusaka raised the benchmark lending rate to 10.25% from 9.75% on May 22 to counter inflationary pressure and support macroeconomic stability.
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But JGB yields continued heading lower, albeit at a slower pace, after data on Friday showed that inflationary pressure in Japan was making relatively slow progress.
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The Trump administration has sought to temper some of the inflationary pressure on housing investment by limiting the tax deductions on homes at higher price levels.
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Dealers said aid inflows could help the rupee, but the central bank will have to tighten interest rates to curb unnecessary credit growth and inflationary pressure.
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Late on Thursday, the central bank raised key interest rates by 150 basis points to fight the inflationary pressure which the devaluation is expected to create.
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A series of rate rises into next year would depend on a continued solid growth path and clear signs of inflationary pressure, particularly through wage gains.
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"Another important factor are power shortages, exacerbated by low water levels, which have slowed growth and added to inflationary pressure as tariffs rise, " said Booth-Clibborn.
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"The ECB will continue to face little home-made inflationary pressure," writes Carsten Brzeski, chief economist for Germany and Austria at ING-DiBa, in a note.
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The BOJ is in a bind, because the economy has performed well this year due to domestic and external demand, but inflationary pressure has not increased much.
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The Bank said this month that rates would need to rise a bit more than expected and sooner, as the economy showed resilience and inflationary pressure grew.
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But Samuel Tombs of Pantheon Macroeconomics said that signs of softening inflationary pressure in the services PMI raised the prospect that inflation would drop off more quickly.
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The pound has lost half of its value since the float and the CBE raised key interest rates by some 700 basis points to ease inflationary pressure.
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Dealers said the aid inflows could help the rupee, but the central bank will have to tighten interest rates to curb unnecessary credit growth and inflationary pressure.
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Bond yields idled as a boost from the trade deal failed to offset pressure from low U.S. producer price inflation data, which highlighted persistently low inflationary pressure.
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The U.S. trucking industry has been under pressure amid what many have cast as a driver shortage, putting inflationary pressure on companies that have to ship their goods.
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The BOE decision comes after the U.S. Federal Reserve held its benchmark rate in a target between 2.25% and 2.5% on Wednesday, citing a lack of inflationary pressure.
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The pound has lost half of its value since the float and the CBE has raised key interest rates by some 700 basis points to ease inflationary pressure.
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Moreover, experts have also said previously that Trump's domestic policies could spark inflationary pressure in the U.S. economy, which could prompt the Fed to raise rates more aggressively.
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The U.S. economy's big services sector can continue to grow without sparking inflationary pressure for finite resources in the way that manufacturing industries traditionally could not, Rieder said.
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"All this means is that inflationary pressure is modest, and the Federal Reserve will feel in no hurry to push through its next interest rate hikes," Lamb said.
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Cetinkaya also said lira depreciation might lead to upside inflationary pressure in the short-term but inflation was expected to trend downward by the middle of the year.
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"In the coming months ... tradable goods will continue to see upwards inflationary pressure in the short term, considering the shock from the depreciation of the peso," Carrasco said.
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But if you always err toward "a little more growth" and "rates a bit on the low side," then over time, more and more inflationary pressure builds up.
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JAKARTA, Jan 22 (Reuters) - Indonesia central bank expects temporary additional inflationary pressure due to a recently imposed value added tax on imported cattle, Governor Agus Martowardojo said on Friday.
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The latest reading showed a 22011% dip on the pleasure side, which outweighed a slight improvement (241.35%) on the pain side that came from a reduction in inflationary pressure.
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In combination, these pieces of research suggest that underlying inflationary pressure did not subside in the second half of 2018, because it was never there in the first place.
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"There's a lot of uncertainty in the world," Bulgurlu said, also citing the weak pound that has caused inflationary pressure in Britain, which accounts for 10 percent of sales.
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However, the cost of goods sold rose by 21.3 percent, to 6.05 billion reais which Ambev said was the result of inflationary pressure in Argentina and higher commodity prices.
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For now, Cabana said he will stay focused on the Fed's statement, which clearly said the Fed is concerned about the implications of global developments and muted inflationary pressure.
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Still, the recovery stemmed mainly from a spike in off-the-books employment, extending a trend that is likely to limit the inflationary pressure from a tighter labor market.
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BANGKOK, March 8 (Reuters) - Thailand's monetary policy needs to remain accommodative to aid the country's economic recovery as inflationary pressure remains soft, the central bank governor said on Thursday.
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While the inflows are likely to help the rupee, the central bank would have to tighten interest rates to curb unnecessary credit growth and inflationary pressure, currency dealers added.
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DISINFLATION EVERYWHERE Bond yields idled as a boost from the trade deal failed to offset pressure from low U.S. producer price inflation data, which highlighted persistently low inflationary pressure.
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DISINFLATION EVERYWHERE Bond yields dropped as a boost from the trade deal failed to offset pressure from low U.S. producer price inflation data, which highlighted persistently low inflationary pressure.
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A broad-based pick up in global economic growth has pushed up energy prices and inflationary pressure that will gain more steam from an increase in U.S. interest rates.
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"Inflationary pressure is there and in a number of categories it's been too significant to fully offset," he said, pointing to rises in the price of pork and cheese.
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"Despite this strong rise in underlying inflationary pressure, we believe that the NBH will likely keep policy easy until at least Q2 18, after the parliamentary election," Barclays added.
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But this season companies have also struggled with higher costs: raw materials, fuel prices and wages have all climbed while trade tariffs piled extra inflationary pressure onto some firms.
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She added that a recent wave of oil price falls was adding additional inflationary pressure and that the central bank did not plan to introduce new regulatory relaxations for banks.
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Industrial producer prices signal inflationary pressure early in the pipeline because unless their change is absorbed by intermediaries and retailers, it is transmitted to the final consumer, impacting consumer inflation.
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Steady economic expansion also offers hope to the Bank of Japan that inflationary pressure will build up next year and nudge consumer prices closer to its 2 percent inflation target.
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"We anticipate domestic inflationary pressure to intensify during 2016, driven by second-round effects stemming from the recent energy price reforms," said a research note by Riyadh-based Jadwa Investment.
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"Positive real interest rates will be held at the level which will ensure demand for loans without increasing inflationary pressure and uphold incentives for saving," the central bank's statement said.
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SYDNEY (Reuters) - A private-sector gauge of Australian consumer prices fell in May, indicating a lack of inflationary pressure that could keep the door open for another cut in interest rates.
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Friday's move puts the rate back at a level where it was before a hike in September last year, something the central bank said was possible due to abating inflationary pressure.
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"Heightened risk and uncertainty will cause sterling to depreciate by around 20 percent immediately following the referendum, which will result in an intense bout of inflationary pressure," the academic body said.
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As lower oil prices reduce inflationary pressure, they sapped momentum for a sell-off in U.S. Treasuries and a rally in the dollar, the market's favourite play since the U.S. election.
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TOKYO, May 29 (Reuters) - St. Louis Federal Reserve Bank President James Bullard said on Tuesday that break-even rates show markets do not expect U.S. fiscal stimulus to increase inflationary pressure.
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Many are waiting for a "Phase 2" round to hash out thornier details, he said, making it unlikely Wednesday's agreement would spark much additional growth or inflationary pressure in either country.
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SEOUL, March 21 (Reuters) - South Korea's central bank chief said on Wednesday the Bank of Korea would keep interest rates accommodative for now because inflationary pressure is likely to stay weak.
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After the central bank's last meeting statement, the odds for a March hike dropped even more, as they did when the last employment report showed weak wage growth — meaning low inflationary pressure.
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"Positive trends in the economy are not accompanied by a higher inflationary pressure," the bank said, adding that recent macroeconomic indicators "confirm greater sustainability of the Russian economy to oil price fluctuations".
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The core PCE deflator excluding volatile food and energy items as well as government-regulated prices, which is a cleaner measure of inflationary pressure within the economy, was up by just 22%.
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The latest move puts the rate back at a level where it was before a hike in September last year, something the central bank said was possible due to abating inflationary pressure.
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Inflation reached a record high in July of around 35 percent on the back of energy subsidy cuts but then gradually declined as inflationary pressure caused by Egypt floating its currency eased.
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The Institute for Supply Management (ISM) survey published on Tuesday showed U.S. factory activity slowed in April, but it highlighted shortages of skilled workers and rising costs, suggesting inflationary pressure is building.
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"It kind of confirms this Goldilocks-type scenario where it's steady growth with really not a lot of inflationary pressure," said Michael Dowdall, investment strategist at BMO Global Asset Management in Chicago.
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"We still believe that the normalization of the monetary policy could take longer than expected because of mounting inflationary pressure in the short term," said Ozgur Altug, chief economist at BGC Partners.
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Investors said that the low unemployment figure, which on its own might point to inflationary pressure on wages, was countered by April's mere 0.1-percent rise in wages, which was below expectations.
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Thailand's central bank on Wednesday held its benchmark interest rate at near record lows, as expected, saying Southeast Asia's second-largest economy continues to face little inflationary pressure as growth pace improves.
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Tax cuts and increased spending at a relatively late point in the economic cycle have also encouraged the Federal Reserve to keep raising interest rates in order to hold inflationary pressure in check.
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The seven-member board will probably maintain the lending rate at 7.75 percent for a third month after raising it 325 basis points over the course of a year to ease inflationary pressure.
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The miner said its EBITDA dropped due to lower revenue, inflationary pressure on costs, higher distribution costs driven by larger export volumes and a rise in rehabilitation costs resulting from revised cost estimates.
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Moreover, prices charged by service firms increased at the fastest pace in nearly two years after a sharper rise in input costs forced businesses to transfer some of the inflationary pressure to consumers.
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But inflationary pressure resurged when the central bank devalued the pound in March by about 13 percent in order to close the gap between official and black-market rates for the U.S. dollar.
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The BOK held its policy rate KROCRT=ECI steady at 1.50 percent in a 6-1 vote at the end of last month, citing doubts about job market recovery and weak inflationary pressure.
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Japan's government also offered a more pessimistic assessment of consumer prices as inflationary pressure fails to build, and official pressure on companies to lower smart phone charges suggests the inflation pace could slow.
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In a sign inflationary pressure is barely building up, an index excluding the effect of both fresh food and energy costs showed inflation of 0.4 percent in October, steady for three straight months.
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Deutsche Bank said it expects others in Asia to follow, in response to tepid growth and limited inflationary pressure, adding that Bank Indonesia and the Philippine central bank could be "the most aggressive".
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In theory, a growing positive output gap should lead to a build-up of inflationary pressure, though the BOJ has conceded that structural factors could keep price growth subdued for longer than expected.
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In a monthly report on market trends, the central bank's analysts predicted higher inflationary pressure in the second half of the year due to cold weather this spring and an expected economic recovery.
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The BoE believes rising wages will create inflationary pressure and require further, gradual increases in interest rates, even as Britain's economy grows only slowly because of its impending departure from the European Union.
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But for now, uncertainty remained high and inflationary pressure was not strong, which meant the bank should maintain its current record-low interest rate of 1.25 percent for the time being, he said.
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However, prices charged by service firms increased at the fastest pace in nearly two years after a sharper rise in input cost forced businesses to transfer some of the inflationary pressure to consumers.
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Governor Lee Ju-yeol said growing doubts about job market recovery, already straining consumer sentiment, together with weak inflationary pressure from domestic demand meant policy makers should stay in a wait-and-see mode.
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Low base rates help affordability, but a material rise in unemployment, reduced investor appetite, and inflationary pressure on consumer prices would have a negative impact on banks' loan books and result in higher LICs.
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"The good thing about this is that it hasn't been an inflationary pressure," Mester said of heftier paychecks, speaking at a University of Kentucky Gatton College of Business and Economics event in Lexington, Kentucky.
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|
Annual inflation has dropped to 13 percent from more than 40 percent three years ago and last month's lifting of sanctions, after an international agreement on Iran's nuclear programme, may further reduce inflationary pressure.
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|
Core consumer prices were seen likely to maintain a moderate increase in June led by energy costs, but the prices of other items were expected remain soft - emphasizing the economy's lack of inflationary pressure.
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Oil prices barely budged after the Federal Reserve right before the close left U.S. interest rates where they were and said it still expected downward inflationary pressure from lower energy prices to prove temporary.
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Even if you consider debt a meaningless number, the size of the things progressives are proposing means that pursuing those initiatives without an offsetting increase in revenue would create a lot of inflationary pressure.
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Investors have become worried that the solid economy in the United States could be showing early signals of inflationary pressure and that the Federal Reserve could raise interest rates more quickly than previously expected.
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Garbis Iradian, chief Middle East and North Africa economist for the Institute of International Finance, a global association of financial institutions, said the increases might result in some short-term inflationary pressure but were needed.
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"There is no inflationary pressure coming from the high street as shoppers remain nervous about spending and discounting continues for many non-food retailers," Mike Watkins, head of retailer and business insight at Nielsen, said.
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BOGOTA, April 26 (Reuters) - Colombia's central bank held its benchmark interest rate steady at 4.25 percent at its meeting on Friday, as inflationary pressure remains in check and the economy benefits from an expansionary monetary policy.
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Underemployment refers to skilled workers stuck in lower-paying jobs and part-time workers who want to work full-time but cannot find a suitable job and could help explain Japan's chronic lack of inflationary pressure.
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Long-dated U.S. government bond yields rose on worries that the president's comments would encourage Fed Chairman Jerome Powell to slow the pace of rate hikes by the U.S. central bank, which could increase inflationary pressure.
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Vlieghe said inflationary pressure at the moment was largely due to sterling's depreciation since last year's Brexit vote and the subsequent rise in import prices, rather than reflecting unexpectedly strong growth since June 2016's referendum.
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Now that the U.S. economy is showing signs of having reached full employment, the Fed is mindful that it needs to continue the process of monetary policy tightening if inflationary pressure is to remain well contained.
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"Investors are just ignoring the consequences and what's going to have to be done in terms of Federal Reserve policy to offset the inflationary pressure that's going to come out of tariffs," he told "Closing Bell."
|
|
The seven-member board voted unanimously to maintain the lending rate at 7.75 percent for a third time last month, after raising it 325 basis points over the course of a year to battle inflationary pressure.
|
|
With average hourly earnings rising only 2.7 percent over the last year, there is not much evidence of the kind of inflationary pressure that might make the Federal Reserve more inclined to tap on the brakes.
|
|
"Inflationary pressure from demand-side isn't expected to be big for the time being, which warrants keeping monetary policy accommodative to support growth," Governor Lee Ju-yeol told lawmakers in opening remarks at a confirmation hearing.
|
|
"Management estimates about 70 percent of Gap's stores are at or above the market rate for employees today noting distribution center wages have seen inflationary pressure with the recent announcement from Amazon to increase wages to $15."
|
|
"(Even) in that case it seems likely to me that, given the gradual move into excess demand that we expect, unit labor costs and inflationary pressure would still pick up as in our August forecast," Ramsden said.
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Volatility in oil prices and the U.S. dollar may be weighing on markets, but people are returning to the workforce, sending employment on a steady upswing and prompting welcomed inflationary pressure — and that's the Fed's main concern.
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This long run of growth should encourage the Bank of Japan to stick with the current monetary easing framework, given its argument that inflationary pressure will percolate through the economy as long as growth is on track.
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"For the coming year there's a need to keep monetary policy accommodative as economic growth will likely hover below the potential growth rate, while the demand-side inflationary pressure will stay weak," Lee said in a statement.
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This expansionary fiscal policy stance will almost certainly force the Federal Reserve to raise interest rates further to contain inflationary pressure, which is all too likely to lead to a further strengthening in an already strong dollar.
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|
"There's enough strength in the labor market to allow them to think about raising rates still, but there's not enough inflationary pressure to require them to do so," said Scott Clemons, chief investment strategist at Brown Brothers Harriman.
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Despite years of inflationary pressure as global prices for oil, Nigeria's main export, dropped, the government and central bank have spent billions of dollars propping up the naira's value in the face of calls for a free float.
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"Higher prices of hydrocarbon products effective June 29, 2017, higher value added taxes effective July 1, 2017, higher electricity prices scheduled for July 2017, as well as other potential regulated price adjustments further increase inflationary pressure," it said.
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With January inflation across the bloc expected to be confirmed at 1.4 percent when official figures are released on Friday, well below the ECB's 2 percent target ceiling, a decline in inflationary pressure will also concern ECB policymakers.
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At an economic forum, he cited heightened political uncertainties, a highly valued Swiss franc in a fragile foreign exchange market, low inflationary pressure and a global environment marked by low interest rates as reasons to keep policy steady.
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It said the downside risks to its forecasts include rising inflationary pressure, tightening of U.S. and EU monetary policies and escalating trade tensions, though it expects as regards the latter that cooler heads will prevail in the end.
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Strong consumer spending makes it more likely that consumer prices will accelerate in the future, which supports the Bank of Japan's argument that it can afford to keep its monetary easing unchanged as inflationary pressure gradually builds up.
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The basket outperformed the S&P 500 by more than 33 percentage points from early 2016 through mid-2018 when wage growth stoked inflationary pressure, pushing break-even inflation to 2.2 percent from 1.2 percent, Goldman Sachs said.
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"In view of positive economic indicators, lower inflationary pressure and growth in large-scale manufacturing the monetary policy committee has decided to keep the policy rate unchanged at 6 percent," Wathra told reporters in Karachi, Pakistan's financial hub.
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"Overall the report is good news insofar as it suggests the economy still has some capacity to grow at an above-trend pace without generating much inflationary pressure," said Michael Feroli, an economist at JPMorgan in New York.
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"A weak sterling over the past few months will continue to fuel inflationary pressure ... So high inflation at a time when wage growth is stagnant doesn't bode well for UK consumers over the long-term horizon," Matys said.
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Core consumer inflation peaked at a 1 percent annual increase in February but has since slowed to a 0.7 percent annual increase in April, raising concern among economists inside and outside the central bank that inflationary pressure is waning.
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Economists said such GDP growth rates would not be enough to generate enough inflationary pressure to take price growth up to the European Central Bank's target of below, but close to 2 percent annually from 0.4 percent in January.
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BOGOTA (Reuters) - Colombia's central bank will keep its interest rate stable at Friday's meeting, a decision that may extend through the remainder of the year given short-term inflationary pressure and a recovering economy, according to a Reuters poll.
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"If rates are going up and if economic growth is still modest, that has potential to create inflationary pressure, it has potential to cause prices of goods to go up, as those additional costs are passed onto consumers," Loewengart said.
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Gold shook off headwinds from a stronger dollar to scale a near two-week peak on Thursday as data pointed to easing inflationary pressure in the United States, boosting expectations of a further interest rate cut by the Federal Reserve.
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"There is market confidence the FOMC will continue to lower rates and provide monetary policy accommodation, but there is no conviction that this will lead to actual inflationary pressure," analysts at BMO Capital Markets said in a recent research note.
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However, though wage growth is edging up, it remains about 2% a year, suggesting that either a surprising amount of slack remains in the labour market or low unemployment does not produce as much inflationary pressure as it used to.
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But prices have recovered from a 1-1/2-year low of $1,059.96 hit in mid-August, propped up by limited safe-haven buying at lower levels linked to concerns over economic growth and inflationary pressure from soaring oil prices.
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But Márquez didn't discard the possibility of targeting specific U.S. products with retaliatory sanctions designed to hurt American producers in key districts, while staving off inflationary pressure that could hurt Mexican consumers, a strategy Mexico has used successfully in the past.
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But prices have managed to stay above a 1-1/0.63-year low of $1,059.96 hit mid-August, propped up by limited safe-haven buying at lower levels linked to concerns over economic growth and inflationary pressure from soaring oil prices.
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Gold has held in a $34 range for the last 1-1/2 months, propped up by limited safe-haven buying at the lower end of the range, spurred by concerns over economic growth and inflationary pressure from soaring oil prices.
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Since then, Mr. Powell and other Fed officials have sought to deliver a more nuanced message, emphasizing that they are paying attention to investors' concerns, and that the absence of inflationary pressure means the Fed can afford to postpone judgment.
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The Bank of Korea left its key interest rate unchanged on Tuesday, as expected, taking note of muted inflationary pressure and showing caution ahead of any further monetary tightening from the U.S Federal Reserve's policy meeting on March 20-21.
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"Investors are just ignoring the consequences and what's going to have to be done in terms of Federal Reserve policy to offset the inflationary pressure that's going to come out of tariffs," said Minerd, the firm's global chief investment officer.
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Economists expect that tightness in the job market to start pressuring wage growth at some point, but it's been tame so far, signaling little inflationary pressure and therefore no reason for the Fed to increase its pace of interest rate hikes.
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"Underlying inflationary pressure is no different today than it was in February," Assistant Governor John McDermott told Reuters in an interview, adding that a spike in headline inflation in the March quarter was mainly due to temporary rises in petrol and food prices.
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"Markets seem to be looking at the soft wage data, which signal rather weak inflationary pressure, and therefore less need for the Fed to raise interest rates," Commerzbank analyst Carsten Fritsch told the Reuters Global Gold Forum in the wake of the report.
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"A weak sterling over the past few months will continue to fuel inflationary pressure ... So high inflation at a time when wage growth is stagnant doesn't bode well for UK consumers over the long-term horizon," said Piotr Matys, currency strategist with Rabobank.
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"In the opinion of certain council members, should data and forecasts incoming in the following quarters suggest stronger inflationary pressure than expected at the time of the meeting, it might be justified to consider an increase in ... interest rates," the minutes read.
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However, though wage growth is edging up, it remains about 2% a year in nominal terms, suggesting that either a surprising amount of slack remains in the labour market or low unemployment does not produce as much inflationary pressure as it used to.
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"The thing that keeps me up at night: I think there is more inflationary pressure in the system than a lot of people really appreciate," the global market strategist at JPMorgan Asset Management said in an interview with CNBC's "Power Lunch " on Friday.
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The RBI has raised its policy rate by 50 basis points this year to 6.50 percent and most analysts expect it to raise rates for a third time next week to stem inflationary pressure due to the sharp fall in the rupee.
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"According to certain Council members, should data and forecasts incoming in the following quarters suggest stronger inflationary pressure than expected at the time of the meeting, it might be justified to consider an increase in the NBP interest rates," the minutes read.
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"The minutes were a bit on the dovish side in the sense that a lot of the conversation piece was around inflation and inflationary pressure or lack thereof," said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California.
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Apart from a robust U.S. dollar which has since moderated amid the Fed's own hesitation, the main reason the Fed has been reluctant to proceed stems from a lack of convincing evidence of rising inflationary pressure, not worries over the job market.
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Meanwhile, economists at the Fed and elsewhere argued that there was no inflationary risk given the depressed state of the economy, and that "core" inflation, which excludes volatile food and energy prices, was a much better indicator of inflationary pressure than commodity prices.
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Next CEO Simon Wolfson, a prominent Conservative "Leave" supporter who sits in the upper house of Britain's parliament, has said Brexit will only materially affect consumer spending in the event that it triggers inflationary pressure on prices or logistical problems at British ports.
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Cesar Vallejo, one of seven central bank policymakers, told Reuters late on Monday inflationary pressure is his main concern, and although the bank has raised the lending rate 175 basis points since September, such increases are unlikely to exaggerate the economic slowdown.
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These would add to inflationary pressure (headline inflation hit 5003% in January, although we think it will drop later this year) and would be politically sensitive, adding to the risk that social unrest will prompt the government to row back from some reforms.
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"The lack of inflationary pressure in the PCE deflator measures of prices is another reason why the Fed could stand pat in March," said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto, referring to the Fed's next interest rate-setting policy meeting.
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"This may lead to stronger calls for policy tightening by the ECB from some quarters, but the Bank will remain wary of the lack of inflationary pressure elsewhere in the euro zone and the potential impact of any hawkish signals on financial markets," she said.
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PRAGUE (Reuters) - New Czech central bank inflation forecasts out next week will raise the prospect of several rate hikes in the coming year due to a weaker currency and greater inflationary pressure from the domestic economy, the head of the bank's monetary department said.
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But gold has recovered from a 0.23-1/2-year low of $1,059.96 hit in mid-August, propped up by limited safe-haven buying at the lower end of its range, spurred by concerns over economic growth and inflationary pressure from soaring oil prices.
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"It will be important to monitor the situation and be ready to remove some of the (past) stimulus as underlying inflationary pressure picks up," the Fund said in a statement to conclude a Budapest visit of a staff team in the past two weeks.
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Meanwhile, at home, prices and input costs have been rising with consumer price inflation hovering around the Fed's 28503-percent inflation target, and indications that core inflationary pressure may yet rise further as the economy continues to grow strongly and import tariffs filter through.
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"Persistently low cost-side inflationary pressure, the slowdown in global growth and the historically low level of inflation expectations have heightened the risk of second-round effects which result in below-target inflation over a sustained period," the Monetary Council said in a statement.
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And so when you think about how to fight inflation, I think the first question is to understand what the source of the inflationary pressure is and then to move forward with a policy tool that you think is going to help you get at that inflation.
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But there is much more debate about how fast it will raise borrowing costs after that, given a lack of clear signs of home-grown inflationary pressure — with wages growing more slowly than before the financial crisis — and the economy facing headwinds from the approach of Brexit.
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If the Fed — under new leadership, as Jerome Powell became chairman this week — believes it can let the economy roar ahead without inflationary pressure, it will probably continue its recent practice of low interest rates and gradual rate increases, which in turn is good news for stocks.
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"The May drop in German headline inflation should be another reminder that the current cyclical upswing in the euro zone takes place without inflationary pressure," ING Bank economist Carsten Brzeski said, adding the data should take further pressure off the ECB to wind down its monetary stimulus.
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Stocks soared Friday after February's jobs report showed that hiring was surprisingly strong, with 313,000 jobs added, but wage growth remained tepid, which was a positive since it means there's no inflationary pressure to push the Fed to raise interest rates any faster than currently expected.
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"As long as the showcase model of the euro zone economy – the German economy – which is also the most advanced in the current cycle, doesn't show any signs of accelerating inflationary pressure, the ECB will feel extremely comfortable with its dovish tapering," said Carsten Brzeski of ING Diba.
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"If an accommodative monetary policy introduced to boost short-term inflationary pressure ends up causing excessive financial imbalances, it could bring low growth, worsen indebtedness," and bring other negative consequences to the economy, Bank of Korea board member Lee Il-houng told reporters at a news conference in Seoul.
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"This is suggesting that there is really not a whole lot of inflationary pressure in Canada right now, thereby no real reason for the Bank of Canada to move any time soon," said Brian Depratto, senior economist at TD. The Canadian dollar weakened against the greenback immediately following the data.
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Not only has the Fed indicated it will continue its slow approach to raising its benchmark interest rate, the November rise in yields came about largely from expectations that President-elect Donald Trump's plans for infrastructure spending and economic stimulus will translate into more U.S. debt issued and inflationary pressure.
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"At the moment, it is a case of which one of these grocery companies are going to be the first to pass on the inflationary pressure that we are going to start seeing impacting into next year," Alex Dryden, global market strategist at J.P. Morgan Asset Management, told CNBC on Tuesday.
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While inflation now appears close to 2 percent, Bullard said his estimate of market-based inflation expectations show that investors "believe there is currently little inflationary pressure in the U.S." Raising rates in that environment could undermine trust that the Fed intends to reach and maintain its 2 percent target.
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"A majority of MPC members judged that, if the economy continued to follow a path consistent with the prospect of a continued erosion of slack and a gradual rise in underlying inflationary pressure then … some withdrawal of monetary stimulus was likely to be appropriate over the coming month," the central bank said.
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Moore in 2015 described the Fed's "zero-interest-rate policy ... just as an addict craves crack cocaine" -- a position he has since reversed as Trump has turned on the Fed's efforts to dampen any potential inflationary pressure and keep the economy in check as it absorbs the Republican tax cut and other expansionary measures.
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"Today's Japanese CPI release underscores the need for further action by the BOJ if they are determined about the 2 percent inflation target," Angus Nicholson, a market analyst at IG, wrote in an afternoon note, adding while energy prices were primarily responsible, the number also underscored lack of inflationary pressure in other parts of the economy.
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"February's fall in euro-zone unemployment suggests that the labor market remains in reasonable health, although it is still too weak to generate any real inflationary pressure," said Jennifer McKeown, senior European economist at Capital Economics, in a note Monday Inflation figures for the 19-country group released last week showed the euro zone remained stuck in deflation territory at minus 0.1 percent.
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" On the Fed and inflation, Art correctly predicted that the Fed would become preoccupied with deflation, not inflation: "I will tell you the one thing that nobody in the market is looking for, that fears of deflation begin to reassert themselves by the end of the first quarter, Everyone is looking for inflationary pressure from the fiscal stimulus, but you may find the countervailing pressure, and you may get it from the small increases in interest rates we have been seeing...virtually no one is looking for that.
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