Greetings,
The United States: US inflation has been staying within a relatively narrow band for over two decades. Deutsche Bank predicts that it will be moving toward the upper end of the range.
Tight labor markets and stronger economic growth, fueled in part by the massive injection of fiscal stimulus, are some of the reasons for higher inflation ahead. The US economy is now operating at full capacity.
The recent dollar weakness should also contribute to higher prices.
However, some economists are not ready to predict a spike in inflation just yet, suggesting that the rising ‘upstream’ inflation is driven by higher oil prices. And according to multiple forecasts, crude prices are expected to stabilize and even decline later this year.
Equity Markets: The S&P 500 is still expensive relative to the rest of the world.
Credit: This chart shows the average maturity for IG bonds by rating.
Emerging Markets: This chart shows hard-currency debt issuance in emerging markets.
Global Developments: Global manufacturing activity has moderated.
China: China dominates emerging markets’ credit expansion.China dominates emerging markets’ credit expansion.
Rates: The Fed’s rate projections for 2020 appear to be too optimistic.
Food for Thought: Largest Fortune-500 political donors.
Edited by Joseph N Cohen
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Thanks to Josh Marte (@joshdigga), Matt Garrett (@MattGarrett3), Joseph Cohen (@josephncohen), Ycharts.com, S&P Global, and Moody’s Investors Service for helping with the research for the Daily Shot.
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