- Bad luck for US car drivers; over half of yesterday’s consumer price changes (year on year) are exclusive to car drivers. Overall, the data still signals pricing power peaked in the second quarter. What is new is politicians have started talking about grocery store and gas pump prices—although it is doubtful US politicians shop often at WalMart in person.
- Politicians can do little about inflation. Tackling shortages will not work—shortages signal weak pricing power. Reversing former US President Trump’s trade taxes will do little, as they mainly hurt profits and jobs rather than prices. Oil prices rarely react to US politicians. Voters may not care anyway—most US consumers see little inflation damage with a higher real standard than six months ago.
- UK third quarter GDP growth was slightly below expectations, while the monthly September data was slightly above expectations. The UK’s growth peaked in the second quarter when consumers were freed to spend savings they did not want on things they do not need.
- ECB Chief Economist Lane is speaking, and the economic bulletin is published. Governing Council member Holzmann has been suggesting that bond purchases could be ended by this time next year—which is a more hawkish interpretation than many would suggest.