Markets are pricing a rapid decline in price inflation and the end of central bank policy normalization. However, there are two challenges ahead that we must consider. The most important is that price inflation is cumulative, and the year-on-year change between January and July was supported by the base effect. When the CPI inflation rate used for
Market expectations of rapid disinflation and a soft landing remain, but January has given a few new risks to the optimistic estimates of disinflation with no impact on the economy. The first risk comes from the commodity complex and freight costs. Market participants have all but ignored the spread of geopolitical risk and assumed the
Big corporations and global leaders adhere to and assume the growing interventionism and the advance of socialism because, for politicians, it is an excellent way of perpetuating their power and control over citizens, while multinationals tolerate it because they have enough financial muscle and size to absorb the pernicious effects of the massive
The United States is borrowing its way to disguise recession. The headline economic figures for the United States look robust. However, details show concerning weaknesses. Real GDP growth surged to 4.9% in the third quarter, above the consensus estimate of 4.5%. However, some analysts, including Bloomberg, expected up to 5% growth based on the
The world equity markets ended November with their biggest monthly rally in three years. Optimism comes from better-than-expected inflation figures, expectations of central bank rate cuts, and general acceptance that earnings and economic growth will be weak but acceptable in 2024. The main challenge for investors in 2024 is to confirm these hopes
Consumer confidence is high, unemployment is low and Treasuries’ yield is at 2.1%, while credit to the economy and corporate financing are not suffering. The weakness in core consumer prices in May, which increased by only 0.1 %, was entirely due to lower prices of used vehicles, and core CPI inflation remains within the Fed target, falling from
Our friend Daniel Lacalle was interviewed recently by BBC to discuss recent developments between trade negotiations between the US and China. On his blog , he goes on to further explain why a trade war would be particularly devastating for China. What the Trump administration was doing was a negotiation tactic. Aggressive, bulldozer-type and, of
( From Daniel Lacalle on Twitter ) His article last year “ Are Central Banks Nationalising the Economy? “ explains how the two charts are connected: The government is not issuing “productive money” just a promise of higher revenues from higher taxes, higher prices or confiscation of wealth in the future. Money supply growth is a loan that
The hypocrisy of the EU in two images. “EU to impose duties on U.S. imports Friday after Trump tariffs”... Really? From Daniel Lacalle’s Twitter @dlacalle_IA Related: Global Reaction to Trump’s Tariffs Highlights the Myth of the “Era of Free Trade” by Tho Bishop Must Free Trade Be Reciprocal? by Frédéric Bastiat Free Trade versus “Free Trade”
The Federal Reserve, through its president Jerome Powell, has indicated that it is preparing to increase its balance “organically”. The effort to separate this latest monetary policy change of course from a full-blown new QE (quantitative easing) is, at the very least, amusing. If we look at what is being discussed, it has nothing to do with
What is the Mises Institute?
The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.