Powell Gets Wall Street Buy-In to View That Inflation Won’t Last
“Federal Reserve Chairman Jerome Powell and his colleagues appear to be winning over investors with the argument that the current surge in consumer prices won’t last. On Thursday, when news broke that U.S. inflation climbed to 5% in May for the first time since 2008, yields on the key 10-year Treasury note moved in the opposite direction — falling to a three-month low of around 1.43%. And while bond-market gauges of expected inflation edged upward, they remained well short of this year’s high reached in May.”
Russia Raises Rates 50 Basis Points, Says More Hikes Needed
“Bank of Russia delivered its third straight increase in interest rates and said more monetary tightening will be necessary as it struggles to contain a spike in inflation. The benchmark rate was raised to 5.5% on Friday, the highest level in more than a year, the Bank of Russia said in a statement. The move was forecast by 30 of the 36 economists polled in a Bloomberg survey. The ruble traded at a 10-month high against the dollar following a rally this week.”
Bank of Korea’s Lee Seeks Timely, Orderly Rate Normalization
“Bank of Korea Governor Lee Ju-yeol said the central bank will seek to normalize its policy at an appropriate time as the economy’s recovery solidifies, prompting a flurry of early rate hike forecasts. In a Friday speech marking the anniversary of the central bank’s founding, Lee said stimulus policies have helped overcome the pandemic crisis, but have also widened inequality by accelerating asset price gains.”
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