May 26, 2023
US Inflation Picks Up, Keeping Fed Tilted Toward Another Hike
US inflation and consumer spending accelerated last month, highlighting steady price pressures and demand that will keep Federal Reserve policy makers tilted toward raising interest rates further.
The personal consumption expenditures price index, one of the Fed’s preferred inflation gauges, rose a faster-than-expected 0.4% in April, Commerce Department figures showed Friday. From a year ago, the measure climbed 4.4%.
Europe’s Economic Engine Is Breaking Down
Germany has been Europe’s economic engine for decades, pulling the region through one crisis after another. But that resilience is breaking down, and it spells danger for the whole continent.
Decades of flawed energy policy, the demise of combustion-engine cars and a sluggish transition to new technologies are converging to pose the most fundamental threat to the nation’s prosperity since reunification. But unlike in 1990, the political class lacks the leadership to tackle structural issues gnawing at the heart of the country’s competitiveness.
Yen at 140 Opens Door to More Weakness But Not Intervention This Time
The yen is close to hitting a bottom against the dollar, and is unlikely to weaken to levels requiring Japan’s intervention, analysts said.
The currency has declined more than 6% this year, touching 140.23 on Thursday. It’ll probably bottom out at around 142-143 yen, with an improving trade account and higher tourism arrivals offering support, according to Market Risk Advisory.
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