With US inflation running at a 3.9% pace (according to the Bureau of Labor Statistics), the Federal Reserve appears to be sitting on a time bomb. According to the Bank of England, inflation in the UK stands at 3.4% and in the Eurozone, it is at 2.5%, both of which are rising. Many believe that even these modest rates of inflation are unsustainable and are going to skyrocket in the near future.
The US has seen a strong recovery over the past few years, but what if it is all fake? Japan’s experience in the early 90s shows that a growing economy does not necessarily translate into healthy economic growth. A rising population and a growing GDP do not necessarily mean that the economy is healthy, while a falling population and a falling GDP can mean the opposite.
The US Federal Reserve raised the interest rate on overnight reserves by a quarter point to a new 1.75% level last month. The new rate is a huge increase from the first increase, which took place over a decade ago. The Fed is now pushing forward with another rate hike, which is likely to take place in the next few months.. Read more about deutsche bank cryptocurrency and let us know what you think.Deutsche Bank released a report Monday showing that the specter of consumer-driven inflation in the United States is real. The bank’s chief economist, David Folkerts-Landau, and other experts point to the Federal Reserve’s easing of monetary policy and the bank’s recent tolerance of rising inflation.
German report: Temporary inflation may turn into stagflation as in the 1970s
According to a number of recent studies, US commodity prices have risen sharply over the past two months. Commodity prices are now rising at a rapid pace: Oil prices are the highest in two years, lumber prices are up 377%, electronics prices are up 10%, copper prices have reached record highs, soybean and corn prices have skyrocketed, and retail prices of beef and pork have been in a price shock. The seventh. In June, German credit giant Deutsche Bank released a report with an alarming warning about inflation in the United States. Deutsche’s chief economist David Folkerts-Landau, head of economic research Peter Hooper and case study researcher Jim Reed contributed to the study. Analysts believe that rising inflation could become a ticking time bomb and that the Federal Reserve could suffer the consequences of its delay in acting. The result of this procrastination will be a greater disruption to economic and financial activity than if the Fed ultimately acts, Folkerts-Landau writes in his report. This in turn could trigger a major recession and set off a chain of financial disasters around the world, particularly in emerging markets, the German economist added. However, inflation may come a little later than many think because the economy is more liquid than last year, when interest rates were still fixed. Consumers will certainly spend at least some of their savings when the economy rebounds, Folkerts-Landau wrote in his report.
Overseas markets shocked by US inflation data
Concerns over US inflation worry overseas markets as Asian and European markets have pulled back due to concerns over US inflation rates. Meanwhile, in an inflationary environment, the crypto-currency economy has not performed as well as many had hoped, while gold on the other hand has gained a lot of value due to the economic fears gripping the United States. The German team thinks the Fed can be patient over the course of the year and continue to tolerate higher inflation rates. However, Deutsche reports that Folkerts-Landau, Hooper and Reed disagree with the Fed’s current assessment. It will probably take another year, until 2023, but then inflation will pick up. And while one may admire that this patience is due to the Fed’s shift in priorities toward social goals, the neglect of inflation has put the global economy on a time bomb, the report said. The consequences can be devastating, especially for the most vulnerable in society. Moreover, the German team argues that inflation may be temporary, but could eventually degenerate into something much worse. The lack of preparation for the return of inflation is worrying. While some of today’s inflation is temporary, it may fuel expectations, as it did in the 1970s, the report said. Even if they are only for a few months, these expectations can be hard to temper with such large incentives. What do you think of Deutsche Bank’s report warning of rising inflation in the US? Let us know what you think in the comments below.
Tags in this story
1970, Asian markets, David Folkerts-Landau, Deutsche, Deutsche Bank report, European markets, Fed, Federal Reserve, inflation, rising inflation, Jim Reed, monetary easing, Peter Hooper, rising inflation, stagflation, time bomb, transient inflation, US inflation Photo credit: Shutterstock, Pixabay, Wiki Commons, Deutsche Bank, Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any goods, services or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.The U.S. Federal Reserve recently raised its benchmark interest rate for the first time in nearly a decade. Many economists have hailed this as an encouraging sign that the economy is strengthening, but others warn the Fed’s actions could have devastating consequences for the nation’s bond market.. Read more about gold deutsche bank and let us know what you think.
bitcoindeutsche bank cryptocurrencydogecoindeutsche bank bitcoinblackrock bitcoingold deutsche bank,People also search for,Privacy settings,How Search works,Bitcoin,Currency,Dogecoin,Payment system,deutsche bank cryptocurrency,deutsche bank bitcoin,blackrock bitcoin,gold deutsche bank,dogecoin price,bitcoin thailand news