Daily update
Daily update
- The autopilot light is burning brightly at the European Central Bank. The gargantuan governing council “decided” to raise rates again (whether 22 people meeting for 2 hours can decide anything is a moot point). Tightening continues until economic data provides convincing leadership.
- The Bank of Japan has practiced masterful inactivity in policymaking for aeons. Today, something happened. The details of yield curve control are not that interesting—the net result is a moderate tightening of policy. BoJ Governor Ueda was supposed to be improving the clarity of communication, but the tightening came as a surprise to markets.
- France, Spain, and Germany all release preliminary consumer price data. The first wave of transitory durable goods inflation is in retreat. The second wave of energy price inflation has reversed. The third wave of profit-led inflation is under pressure. Disinflation should be evident in the data, though local peculiarities of calculation may add noise.
- US June personal income, spending, and inflation figures (the personal consumer expenditure deflator) are due. This aggregate picture does not do justice to US economic divergence. Lower income groups are under more pressure than middle income groups, and some areas like Florida are experiencing lower living standards from localized inflation. Overall, middle income consumers should support spending.
