Quick Glance: Boosting Productivity Key to Taming Inflation, Says RBA's Outgoing Lowe
- The outgoing head of Australia's central bank emphasizes the importance of boosting productivity to control inflation.
- An overvaluation of wages and profits relative to inflation could lead to adjustments in monetary policy.
- Lowe acknowledges that boosting productivity is a political problem.
- The aggressive tightening of monetary policy has helped rein in inflation.
Quick Glance: BOJ to Discuss Changes to Yield Curve Control to Allow Rates Above 0.5%
- The Bank of Japan will discuss changes to its yield curve control policy at a policy board meeting on July 28.
- Under its yield curve control, the central bank buys large quantities of Japanese government bonds if 10-year yields are expected to exceed its allowable range of 0.5% below or above zero.
- In early July, the bank surveyed major banks about their expectations for long-term rates if yield curve control was adjusted or scrapped.
- A more flexible version of yield curve control could alleviate downward pressure.
Quick Glance: Bank of England under fire as Rees-Mogg calls for review of inflation target
- Politicians across parties criticize Bank of England as it prepares to raise interest rates again this week.
- Bank is legally bound to target a 2% inflation rate and has been raising interest rates at every meeting since late 2021 to achieve this.
- Sir Jacob, the former business secretary, suggests that revision of the inflation target is 'probably overdue'.
- How much will my mortgage increase? Implications of next Bank of England interest rate decision on payments.
Quick Glance: Inflation Expected to Decline, But Achieving Bank of England Target Uncertain
- Tomorrow's figures are expected to show a decline in inflation rate to around eight percent in April from 10.1 percent in March.
- The Bank believes that one third of the impact of their twelve consecutive interest rate increases since December 2021 has already affected the economy.
- Once the remaining impact is felt, experts can claim to be leading the fight to achieve the official two percent inflation target.
- Bank of England predicts inflation will return to target by 2025.
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Quick Glance: The Federal Reserve of the United States lifts the benchmark interest rate by half a percentage point to slightly under 4.5 percent.
- At the same time, it stated that it will not relent in its fight against inflation.
- The main interest rate could be above 5% for the entire year of 2023.
- Second, even with a key rate of somewhat less than 4.5 percent, the cycle is unlikely to be over.
- To go back to the two percent target, he said he would accept some "macroeconomic pain" - that is, a minor uptick in the extremely low unemployment rate.
Faster, faster, exponentially faster!
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