Visit The Boston Globe Share on Twitter Share on Facebook Comment on this Scroll to top of page By Christopher Condon Bloomberg News March 26, 2019 Federal Reserve Bank of Boston President Eric Rosengren still thinks the central bank’s next move for interest rates is more likely to be a hike than a cut. He just won’t be surprised if that turns out wrong.In a March 22 interview Rosengren said he’s “more optimistic” over the outlook for economic growth and inflation than most of his colleagues on the central bank’s policy-setting Federal Open Market Committee. If that turns out to be right, he said, “it is possible the next move would be up.”“I’m also quite willing to accept that if the economy weakens and the global economy weakens more than I’m anticipating — and the recent data could be consistent with that, then the next move could be down,” he said. Advertisement Rosengren is … [Read more...] about Fed’s Rosengren predicts interest rate hikes, despite uncertainty
Predicting inflation rates
Looking for news you can trust?Subscribe to our free newsletters. What’s the best measure of inflation? The answer depends a lot on what you’re doing. Predicting future inflation? Figuring out how much we really spend on defense? Comparing physician salaries around the world? There are different measures of inflation that work best for all of them. But let’s assume we just want “ordinary” inflation. That is, the average price rise experienced by the average family for a basket of average goods (food, gasoline, clothing, rent, etc.). The two main contenders are CPI—the Consumer Price Index—which you see on the news every month when they tell you how much “inflation” rose, and PCE—Personal Consumption Expenditures—which you never see. However, PCE is widely used in various professional contexts. There is, generally, not much difference between the two. This chart from FRED covers the past five years and shows periods … [Read more...] about How High Is “Real” Inflation?
Creighton University Professor Ernie Goss, PhD, said rising interest rates, trade tensions and rising inflation are warning signs of a possible economic downturn. While Goss emphasizes that the U.S. economy is strong, he expects the economy may be headed toward a downturn as early as the latter part of 2019 or in 2020. “As the last recession showed us, it’s very hard to predict the timing, but the U.S. economy is definitely headed toward higher risk,” Goss said. Goss, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business, said there are signs of trouble as the gap, or yield curve, between short-term and long-term interest rate decreases. The yield curve is currently at 0.30 percent, the lowest it’s been since the last U.S. recession, which was from 2007 to 2009. “Since 1980, every U.S. recession has been preceded by a period in which short term rates … [Read more...] about Opinion: Interest, inflation, trade could indicate coming downturn
Home buyers waiting on a return to lower mortgage rates before buying are probably out of luck, a top housing economist told local home builders and Realtors Tuesday. Lawrence Yun, the chief economist for the National Association of Realtors, said home borrowing rates are headed higher as the Federal Reserve Bank tightens its monetary policy, inflation edges higher and government deficits worsen. "Some consumers may be thinking that because mortgage rates are higher than they were a year ago, maybe I should just wait until rates fall down again," Yun said during a luncheon speech to the Greater Chattanooga Realtors and the Home Builders Association of Chattanooga. "Well, they will be waiting forever." The top economist for America's biggest real estate association said he expects 30-year mortgage rates will likely rise to about 5 percent, up from the current rate of 4.75 percent, over the next 12 months. That's still only a fraction of the 14 percent mortgage rates of the 1970s when … [Read more...] about Despite prospects of higher mortgage rates, housing market should continue to improve
Sections SEARCH Skip to content Skip to site index Europe Subscribe Log In Subscribe Log In Today's Paper Advertisement Supported by The Interpreter ByMax Fisher Aug. 14, 2018 Inflationary crises, like the one looming over Turkey, are bad news for any government, but they are especially dangerous for a certain subset of authoritarians: populist strongmen. They are unusually prone to creating this sort of crisis, unusually inhibited from fixing it and unusually slow to recover. They have, on average, higher rates of inflation and more artificially undervalued currencies. Their central banks are less independent, making them less capable of intervening. Potentially catastrophic on their own, these are symptoms of a set of weaknesses and liabilities that go beyond monetary policy to the core of populist strongman rule. Before Turkey, there was Venezuela’s Nicolás Maduro and his predecessor, Hugo Chávez, who oversaw … [Read more...] about Why Inflation Is Bad for Populist Strongmen