Overseas Headlines – June 10, 2022

United States:

US Inflation Quickens to 40-Year High, Pressuring Fed and Biden

“US inflation accelerated to a fresh 40-year high in May, a sign that price pressures are becoming entrenched in the economy. That will likely push the Federal Reserve to extend an aggressive series of interest-rate hikes and adds to political problems for the White House and Democrats. The consumer price index increased 8.6% from a year earlier in a broad-based advance, Labor Department data showed Friday. The widely followed inflation gauge rose 1% from a month earlier, topping all estimates. Shelter, food and gas were the largest contributors.”



Banks Change Forecasts on ECB Rate Hikes, Differ Over Path

“Economists are rushing to revise their forecasts for the path of euro-area interest rates, but disagree over how fast and far the European Central Bank will ultimately increase borrowing costs. The ECB on Thursday committed to start raising its deposit rate from -0.5% in July and signaled a willingness to turn more aggressive if the outlook for inflation doesn’t improve.”



BOJ to Stand Pat Unless Yen Breaches 140, Polled Economists Say

“The Bank of Japan is expected to hold firm next week with expectations of policy adjustments this year weakening among economists unless the yen breaches the 140 mark against the dollar. All but one of 45 analysts said the bank will leave its yield curve control program and asset purchases untouched at the conclusion of a two-day meeting next Friday, the conclusion of a two-day meeting next Friday, according to a Bloomberg survey.”



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