Janet Yellen is no Paul Volcker
- The Bank of Japan offered to buy bonds with the aim of enhancing their value in the market (there is an adjective in the English language that covers such market actions). No one sold. Will this market action transform the bleak expectations of Japanese consumers? It will not.
- Possibly outgoing Fed Chair Yellen testifies on the economic outlook to Congress. She is likely to signal that a December rate hike is still on track. The issue is "what next?" Some in the markets have drawn analogies to the Reagan era, but Janet Yellen is no Paul Volcker.
- US consumer price inflation is likely to underscore that the US remains a loose monetary policy environment. Most measures are around their long-term averages (core is hovering around 2.25%). Any Trump inflation impact on the third of the US CPI that represents shelter will be felt in 2018.
- Euro area CPI continues to show the oil base effect at work on the headline rate (expected at 0.5%, from a low of -0.2% this year). There is still more base effect to go. The issue of inflation in the Euro area is less the average and more the divergence.