Main Topic: U.S. inflation and the Federal Reserve's efforts to control it.
Key Points:
1. U.S. inflation has declined for 12 straight months, but consumer prices increased 3% year-on-year in June.
2. The Federal Reserve aims to reduce inflation to about 2% and plans to raise its key federal funds rate to over 5%.
3. The Fed is concerned about high inflation due to a strong labor market, rising wages, and increased consumer spending, and aims to slow the job market to control inflation.
Main Topic: The current state of inflation and its impact on prices
Key Points:
1. Price increases have started to decrease from the highs experienced during the pandemic.
2. Some goods and services have steadily increased in price over the course of the pandemic.
3. The U.S. is unlikely to return to pre-pandemic price levels in the near future.
### Summary
Inflation in Argentina has reached 113%, pushing 40% of the population into poverty, as the country faces an economic collapse that could see the far-right return to power under Javier Milei, a rock-singing former sex coach who has threatened to abolish the central bank.
### Facts
- 💸 Argentina is experiencing an economic collapse with annual inflation reaching 113%, its highest in over 30 years.
- 💰 Inflation has pushed 40% of the population into poverty as soaring prices outpace wages.
- 📉 The crisis escalated when the central bank raised interest rates to 118% to halt a sell-off in government bonds and the Argentine peso, which hit a record low against the dollar.
- ⬇️ Inflationary pressures forced officials to devalue the peso by 18% on Monday, which some economists believe may fuel further inflation, possibly reaching 150%.
- 🏛️ The far-right, led by Javier Milei, a rock-singing former sex coach, has gained popularity and threatens to abolish the central bank if they come to power.
- 🌎 This serves as a stark contrast to the inflation battle faced by the Bank of England, where inflation stands at 6.8% and interest rates have been raised to 5.25%.
### Summary
Former Toys "R" Us CEO Gerald Storch warned that the economy is likely to face a difficult holiday season due to persistent inflation. Other economic stresses such as rising interest rates, credit card debt, and student loans are also contributing to consumer difficulties.
### Facts
- Inflation remains sticky despite the Inflation Reduction Act that was passed a year ago.
- Sales of physical products have been declining for 11 consecutive months when adjusted for inflation.
- The July consumer price index (CPI) rose 0.2%, with prices climbing 3.2% from the same time last year.
- Pulte Capital CEO Bill Pulte suggests that the economy is in a period of stagflation with low growth and high inflation.
- Shelter costs, accounting for 40% of the core inflation increase, rose 0.4% for the month and are up 7.7% over the past year.
- Americans are spending $709 more per month on everyday goods and services compared to two years ago.
- Consumers are shifting towards value retailers in response to inflation.
- President Biden acknowledges that the Inflation Reduction Act was not solely aimed at reducing inflation but rather focused on generating economic growth.
### Summary
The top 10 African nations where inflation spiked the most from January to July are Egypt, Congo, Gambia, Benin, Malawi, Nigeria, Zambia, Somalia, Madagascar, and Burundi.
### Facts
- 🇪🇬 Egypt experienced the highest inflation spike of 10.7% from January to July.
- 🇨🇩 Congo's inflation rate increased by 10.5% during the same period.
- 🇬🇲 Gambia saw an inflation spike of 4.7%.
- 🇧🇯 Benin experienced a 2.6% increase in inflation.
- 🇲🇼 Malawi's inflation rate went up by 2.5%.
- 🇳🇬 Nigeria's inflation rate increased by 2.3%.
- 🇿🇲 Zambia had a 0.9% inflation spike during the period.
- 🇸🇴 Somalia experienced a 0.4% increase in inflation.
- 🇲🇬 Madagascar's inflation rate went up by 0.4%.
- 🇧🇮 Burundi saw a 0.4% inflation spike.
Argentina is experiencing an economic collapse with annual inflation reaching 113%, pushing 40% of the population into poverty, and potentially leading to the return of the far-right under Javier Milei.
Argentina should focus on fiscal spending cuts and a recession rather than adopting the dollar as its currency to address the recent peso crash, according to an economist.
Latin American currencies are under pressure from a strong dollar as traders await remarks from Federal Reserve Chair Jerome Powell on U.S. interest rates, while the Chilean peso reaches a three-week high; meanwhile, Argentina stocks are seen as a "safeguard of value" amid economic turmoil, but the country faces opposition to joining the BRICS bloc.
Brazil's annual inflation accelerated more than expected in August, reaching 4.24%, as the central bank continues to cut interest rates in its efforts to boost the economy.
US inflation remains above 3% as the cost of goods and services rose by 0.2% in July, prompting speculation that the Federal Reserve may freeze interest rates to manage inflation without causing a recession.
Argentina's peso currency is at risk of another devaluation after the upcoming presidential election, with estimates suggesting a 16.6% devaluation in the three months following the vote.
The article discusses how the rate of inflation has impacted processors, distributors, and other middlemen, with some benefiting from price increases but now at risk of a slowdown.
Egypt's annual inflation reached a record high of 39.7 percent in August, as the country faces an economic crisis exacerbated by soaring food and drink prices.
Americans are expecting high inflation to persist over the next few years, with a median expectation of 3.6% one year from now and estimates of around 3% three years from now, according to a survey by the Federal Reserve Bank of New York. This suggests that sticky inflation may continue to be a concern, as it surpasses the Fed's 2% target. Consumers also anticipate price increases in necessities such as rent, gasoline, medical costs, and food, as well as college tuition and home prices.
Argentina's Consumer Price Index likely rose 11.8% in August, the highest monthly figure since 1991, due to a sharp devaluation of the local peso currency and the country's ongoing inflation crisis.
The Consumer Price Index is expected to show an increase in inflation in August, with headline inflation rising to 3.6% and core inflation easing to 4.4%, but the market is accustomed to this trend and the Federal Reserve is unlikely to change its rates at the upcoming meeting.
The latest inflation report is expected to show a steady increase in consumer prices, with economists predicting a 3.6% overall inflation compared to last year, indicating that inflation is gradually coming down but still remains above the Federal Reserve's target.
Argentines face daily challenges in trying to find deals and lower prices as the country's inflation skyrockets above 100%, leading to a cost-of-living crisis and increased poverty levels.
Argentina's dollar scarcity should not prevent the country from adopting the dollar as its currency, according to economist Francisco Zalles, who believes that dollars would flow back into Argentina once it makes the switch and that Javier Milei's plan to dollarize would be successful. However, other commentators have warned that adopting the dollar without ample reserves could have catastrophic consequences.
US wholesale prices increased at a faster pace in August, indicating that inflation remains persistent despite interest rate hikes by the Federal Reserve.
August inflation rose to 3.7%, the highest month-to-month increase since June 2022, driven by rising gas prices, which accounted for over half of the rise, while prices for shelter and food remained elevated; however, the Federal Reserve's reaction to the data is uncertain as there are signs of prices moderating but also concerns over inflation remaining too high.
Israel's annual inflation increased to 4.1% in August, surpassing the central bank's target range of 1%-3%, as consumer prices rose by 0.5%, driven by increases in the cost of fresh vegetables, culture and entertainment, transportation, and housing.
Uruguay's central bank is thriving with low inflation, a strong currency, and a pivot towards interest rate easing, while Argentina's economy struggles, highlighting the diverging paths of the two neighboring countries.
Germany is projected to be the most heavily impacted by the global economic slowdown due to higher interest rates and weaker global trade, according to the Organisation for Economic Co-operation and Development (OECD), with its economy likely to shrink this year alongside Argentina and experience a weaker 2024. The slowdown in China, inflationary pressures, and tightening monetary policy are among the factors affecting Germany's growth. The OECD also warned of persistent inflation pressures in various economies and called for central banks to maintain restrictive interest rates until underlying inflationary pressures subside.
Despite assurances from policymakers and economists, inflation in the US continues to rise, posing significant challenges to the economy and financial stability.
Canada's annual inflation rate in August was 4.0 percent, with major cities experiencing varied rates, while South African bonds continue to decline, and the stock market awaits the Federal Reserve's decision on interest rates.
Bitcoin's price in Argentine pesos has risen significantly, but due to high inflation rates in Argentina, it has not been a reliable store of value compared to the US dollar.
Argentina is facing a currency crisis and high levels of inflation, but the annual Mundial de Tango competition continues to take place amidst the economic chaos.
Inflation is expected to rebound in 2024 due to a mismatch between supply and demand created by the shift from services to goods during the pandemic, as well as a chronic shortage of workers, according to BlackRock strategists. This could lead to higher interest rates and a higher risk of recession.
Australian consumer inflation grew as expected in August, driven by surging energy and housing costs, raising speculation that the Reserve Bank may need to further increase interest rates.
Inflation in Argentina has caused poverty levels to rise, with 40.1% of Argentines living in poverty, and the country is heading towards its sixth recession in a decade, leading to increasing despair ahead of the upcoming election.
The Federal Reserve's preferred measure of inflation decreased in August, indicating that efforts to combat inflation are progressing, although there are still price growth pressures that could lead to further interest rate hikes by the central bank.
Argentina is facing a presidential election amid an economic crisis marked by soaring inflation, recession, and a high poverty rate, with leading candidates divided over how to address these issues, including a suggestion to dollarize the economy.
Inflation is impacting Americans across the country, with the Miami-Fort Lauderdale-West Palm Beach metro area experiencing the highest increase in consumer prices at 7.8%, followed by Denver, Atlanta, Seattle, and Detroit, according to WalletHub. Housing prices are a major driver of high inflation in cities like Miami, and while experts anticipate a gradual cool-down of prices, patience is needed.
Corporate Argentina opposes full dollarization of the economy, according to a survey of 125 business people, with only two individuals supporting the proposal put forth by presidential election frontrunner Javier Milei, highlighting potential challenges faced by Milei if elected.
The handwritten notebooks of a Buenos Aires barber chronicle the devastating impact of Argentina's 19,900% inflation over several decades, with current President Alberto Fernandez overseeing the fastest price rises in the past 30 years, driving up poverty rates and causing a decline in purchasing power.
The notebooks of a Buenos Aires barber chronicle 19,900% inflation in Argentina over three decades, with current President Alberto Fernandez experiencing the fastest price rises of any administration, creating a cost of living crisis and driving voters towards a right-wing radical.
Argentina's peso hits a historic low of 1000 pesos per US dollar on the black market as the country's inflation remains high and uncertainty ahead of the presidential elections increases demand for hard currency.
A new study reveals that food prices in the United States have experienced an inflation rate of 5.7 percent compared to the global trend, with countries such as Venezuela, Lebanon, Argentina, Turkey, and Egypt being the most affected.
Wholesale level inflation surged more than expected in September, indicating the challenge of controlling price pressures in the economy, which has implications for the Federal Reserve's interest rate decisions.
Argentina's upcoming presidential election will require the next government to cut spending, stop printing money, and address the country's high inflation and economic challenges, according to executives and members of the business community.
The U.S. government's upcoming inflation report is expected to show a cooling off of inflation, with overall prices for consumers rising by 0.2% compared to August and 3.6% compared to a year ago, and core inflation expected to be up 4.1% from September last year, indicating slower price increases in September than in August.
The upcoming monthly inflation report is expected to show that inflation in the US is cooling off, with overall prices for consumers rising by 0.2% compared to August and 3.6% compared to a year ago, indicating slower price increases in September than in August. However, if the report reveals that inflation remained higher than expected, especially in core areas, it may prompt the Federal Reserve to raise interest rates again, further slowing the economy.
