All Inflation articles – Page 33
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White papersFinding a third way between throttling energy demand and dirty fossil fuel
The war in Ukraine is significantly impacting energy security, particularly in Europe. Beyond oil & gas markets, the conflict has a variety of negative macroeconomic effects. Notably, the fighting in Ukraine and the resulting sanctions on Russia are disrupting commodity supplies, exacerbating ‘cost push’ inflation set in motion by the pandemic and its aftermath.
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White papersLaws of Economics Strike Back
Franklin Templeton Fixed Income believes further hawkish surprises lie ahead, as even the current expected policy path would leave real interest rates negative well into next year. Their latest Fixed income views explore the implications for investors.
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White papersEuropean Logistics Reaching a Turning Point
The ECB has signaled a 25-50 bps rate hike in July and September as on the back of the on-going Ukraine conflict, inflation has continued to move up. Depending on the country, European government bonds have spiked by 100-200 bps over the last three months. These higher bond yields will impact on logistics markets as measured by our new Jun-22 base case and downside scenarios.
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White papers2022 Midyear Outlook - Long-term perspective on markets and economies
We are living through a pivotal time in history, marked by geopolitical realignment, high inflation, volatile financial markets and the end of a 40-year period of declining interest rates. The title of this new era could be Brave New World or Back to the Future. But the title I would select is Revenge of the Boomers, because a lot of these events are rhyming with the past, particularly the early 1960s.
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White papersWith inflation on the rise, what is the long-term economic impact?
Inflation’s resurgence during the past year has awakened fears that the global economy has returned to the 1970s – a period when growth stagnated and central banks lost control of price stability. That’s too pessimistic a view.
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White papersFighting inflation: What the latest Fed move means for investors
The first month of summer came in hotter than expected. Data released in June showed that annual headline CPI inflation—previously thought to be cooling—had touched a new 40-year high.
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White papersCash dethroned: reallocation opportunities for insurers under Solvency II
‘Cash is king’ remains at the forefront of many defensive allocations for insurers operating under Solvency II. However, ultra-low cash rates, rising short-term bond yields and inflation are all a material drag on portfolio returns. We believe it is possible for these insurers to reallocate a strategic part of their cash holdings to potentially higher-yielding, liquid, defensive assets without incurring excessive risks or capital costs.
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White papersThe ECB Joins the Growing Circle of Hawks
The ECB officially joined the hawkish camp, announcing a more aggressive path of rate hikes, which led markets to reprice the euro curve higher. Meanwhile, despite a move higher in initial claims, a strong U.S. jobs report will keep the FOMC on its hawkish rate-hiking path.
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White papers14-15 June FOMC meeting: Fed becoming worried about inflation expectations
The FOMC statement was hawkish. The Fed stated the Committee is strongly committed to returning inflation to its 2% goal, signifying it is not afraid about being hawkish until inflation comes down. While the FOMC downgraded the impact from the Russia-Ukraine war on the US economy, it was more confident that this is exerting upward pressure on inflation.
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White papersThe Fed Can’t Stop, Won’t Stop
The Fed turned more hawkish this week, upgrading its outlook for the Fed Funds rate, and lowering its outlook on growth—leading to a risk-off tone in markets. Meanwhile, the ECB announced a new tool to help address the uneven transmission of monetary policy normalization.
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White papersA (stag?)flationary tantrum: assessing the current market sell-off
We are entering a tough phase of the regime shift, as the risks over economic growth add to the already hot inflationary backdrop. This means that stagflation fears will continue to drive the market and risk assets are likely to remain very volatile, particularly the most indebted companies and those with still excessive valuations.
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White papersThe Fed Makes Inflation Fighting Priority Number One
The Fed raised its benchmark interest rate by 75 basis points yesterday, to a range between 1.50% and 1.75%, and signaled stronger inflation-fighting measures ahead. We think that policy path will eventually cool inflation—but at a greater cost to economic growth than the Fed expects. And financial markets will likely stay volatile for a while.
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White papersGlobal real estate outlook: The impact of rising inflation
As prices surge to their highest levels in decades, the impact of rising inflation is a concern for investors everywhere. As downside risks have increased, real estate markets are dealing with the impact of rising debt and construction costs, as well as potential asset repricing.
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White papersThe Fed presses harder on the brakes
Financial conditions continue to tighten, but perhaps not fast enough. Job creation remains strong and consumer spending and inflation are running hot, so the Fed accelerated its rate of interest rate increases, hiking by 75 basis points at its June meeting.
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White papersA focus on inflation
The conflict in Ukraine has delivered a commodity price shock similar to that of the early 1970s, shattering hopes that the inflationary uptick may prove to be transitory.
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White papersA Scenic But Treacherous Trail
Aggressive central bank tightening and declining purchasing power suggest the slowdown in growth should be steep, and faster than the inflation slowdown.
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White papersThe embarrassing legacy of financial capitalism: implications for investors
In the ongoing regime shift, investors have to deal with significant legacies stemming from the previous regime (the one initiated under former Fed Chair Paul Volcker), namely two forms of inflation: asset price inflation over the course of three decades and more recently inflation in the price of goods and services.
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White papersShifts & Narratives #20 - Stagflation and its roots in capital misallocation
In the ongoing regime shift, investors have to deal with significant legacies stemming from the previous ‘Volckerian’ regime, namely two forms of inflation: asset price inflation over the course of three decades and, more recently, inflation in the price of goods and services.
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White papersThe Path From the Peak
With inflation still above-trend, prices rising for necessities, central banks tightening policy, and fallout from China’s zero-COVID policy, we will watch for a sharp slowdown in growth over the 12–18 month outlook.
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White papersThe myth of the fiscal free lunch: beware of the trap. An investor’s viewpoint
The idea that there is a comfortable degree of budgetary room for more active fiscal policy goes hand-in-hand with the assumption that a sustained bond correction (higher safe real interest rate) is not only unjustified based on fundamentals, but is also impossible. This comes as no surprise. On average throughout modern history, safe real interest rates have been lower than the GDP growth rate, making it easier to finance public deficits.
