fbpx

IMF warns on inflation, says the Fed and others should be prepared to tighten policy

From www.cnbc.com
2021-10-12 16:16:30

Excerpt:

Central banks such as the Federal Reserve should be prepared to tighten policy in case inflation gets out of control, the International Monetary Fund warned in a report Tuesday.

While the IMF said it largely concurs with assessments from the Fed and many economists that the current global spate of price increases eventually will ease, it noted there is “high uncertainty” around those forecasts.

The cautionary tone mentioned the U.S., as well as the U.K. and other developed economies, as places where “inflation risks are skewed to the upside.”

“While monetary policy can generally look through transitory increases in inflation, central banks should be prepared to act quickly if the risks of rising inflation expectations become more material in this uncharted recovery,” Gita Gopinath, the IMF’s economic counselor and director of research, said in an executive summary accompanying…

 

Read Full Article

 

Sharp surge in energy prices threatens economic recovery and is already slowing growth

From www.cnbc.com
2021-10-12 16:18:31

Excerpt:

 

 

Woman pumps gas outside of Wawa storefront

Saul loeb

Energy prices are surging, and the economy is already feeling the pinch of higher fuel costs though it is far from stalling out.

There is an unusual coincidence of much higher oil, natural gas and coal prices, combined with other rising commodities and supply chain disruptions. That perfect storm of shortages and higher prices begs the question of whether the economy could go into a serious tailspin or even a recession.

Economists say, for now, the jump in prices is not the type of oil shock that will turn U.S. growth negative, but there will be economic consequences of higher energy costs, particularly in places like Europe where natural gas prices have skyrocketed.

“Periods of trending oil prices tend not to be a problem,” JPMorgan chief economist Bruce Kasman said. “The periods of spiking oil prices tend to be what gets you into trouble. They tend to be largely supply driven, and they tend to have disruptive elements that are more…

 

Read Full Article