Saturday, November 23

Global Economics

Looking at economic forecasts for the global economy and the impact of national and multinational policies.

U.S. Deficit For FY2021 Reached $2.8 Trillion, CBO Says
10Nov By Patti MohrNo Comments
Global Economics, Types of News: Brief, United States

U.S. Deficit For FY2021 Reached $2.8 Trillion, CBO Says

November 10, 2021--For the fiscal year that ended September 30, the U.S. government ran a $2.8 trillion budget deficit, the Congressional Budget Office reported on Monday. The figure was $360 billion less than the deficit in 2020 but three times the deficit from 2019. As a share of the GDP, the 2021 deficit was 12.4 percent the size of the economy. That's down from 15 percent at the peak of the pandemic in FY2020 but up from 3.2 percent in 2016. Federal spending increased above normal levels in 2020 and 2021 in response to the pandemic. They included the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Paycheck Protection Program and Health Care Enhancement Act, the Consolidated Appropriations Act, 2021 (CAA), and the American Rescue Plan Act of 2021 (ARPA). Meanwhi...
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U.S. Inflation Rises To 6.2 Percent
10Nov By Patti MohrNo Comments
Global Economics, Types of News: Brief

U.S. Inflation Rises To 6.2 Percent

November 10, 2021--The Consumer Price Index increased 0.9 percent in October and 6.2 percent for the year, the Bureau of Labor Statistics reported today. While the rise in prices was "broad-based," the cost of energy, shelter, food, and vehicles rose at higher levels, the BLS said. Meanwhile, prices of airline fares and alcoholic beverages declined. Excluding food and energy, inflation still rose 4.6 percent, which was the "largest 12-month increase" since 1991. Over the last 12 months, energy prices increased the highest at a rate of 30 percent with fuel prices climbing by 49 percent. In recent meetings, the central banks for Europe, Britain, and the United States predicted inflation would rise higher this year and into 2022. Yet all three monetary policy boards left interest rat...
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Bank of England Projects Inflation Rising To 5 Percent Inflation, Leaves Interest Rate At 0.1 Percent
5Nov By Patti MohrNo Comments
Global Economics, Types of News: Brief

Bank of England Projects Inflation Rising To 5 Percent Inflation, Leaves Interest Rate At 0.1 Percent

The committee for the Bank of England met November 4, 2021 and decided to leave interest rates unchanged. November 5, 2021--In a move that surprised many observers in the financial sphere, the Bank of England voted 7-2 yesterday to maintain its federal Bank Rate at 0.1 percent and it voted 6-3 to continue purchasing U.K.-government bonds. That came as a surprise move to many financial observers, including Merryn Somerset Webb is editor-in-chief of MoneyWeek, who had expected a moderate rise in the interest rate to 0.25 percent. Writing an opinion piece for the Financial Times, Webb said the concern is about reputation and expectation. "The Bank has told us for ages that the inflation we feel all around us is transitory," she wrote. "But it is also now telling us that it is “materi...
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A Closer Look: Causes & Effects of Global Coal Shortage
4Nov By Ramsha ZubairiNo Comments
Energy Policy, Oil & Gas, Global Economics, Types of News: Analysis

A Closer Look: Causes & Effects of Global Coal Shortage

AP photo of Northwest China Coal Shortages Caused Power Outages in India, China And Tajiskistan By Ramsha Zubairi November 4, 2021—Coal prices surged this Fall, producing electric outages in multiple countries. As the global economy continues to get back on track after the pandemic, coal industries struggle to meet the rising demand for the commodity. Graph by Trading Economics. In recent weeks and months, many communities in India, China and Tajiskistan faced some of the worst power outages that they have in years. In China, the population got by with streetlights and elevators turned off and limited heating of offices. Some factories and schools were also forced shut to manage the electricity crisis. Overall, China underwent what has been its worst power shortage in de...
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Fed Decision ‘Skews Risk Toward Inflation’
3Nov By Patti MohrNo Comments
Finance, Investing, Global Economics, Types of News: Brief, United States

Fed Decision ‘Skews Risk Toward Inflation’

Despite Economic Recovery And Rising Prices, U.S. Central Bank Keeps Interest Rates Near Zero November 3, 2021—The Federal Reserve announced today it will begin reducing the amount of Treasury securities it purchases every month, in light of economic progress. However, in a move that mirrors the European Central Bank decision, the U.S. central bank is maintaining an accommodative stance on monetary policy, meaning it will continue to increase the money supply. Specifically, the committee is keeping the Federal funds rate at 0 to 0.25 percent, which is slightly above Europe's negative rates. A key point is the Fed is no longer basing the decision on the U.S. unemployment rate, which is historically low. The measure of success for the central bank now includes the labor participat...
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Inflation Issues ‘Fade Away,’ ECB Says
28Oct By Patti MohrNo Comments
Europe, EU, Eurozone, Global Economics, Types of News: Brief

Inflation Issues ‘Fade Away,’ ECB Says

European Central Bank Keeps Stimulus Policy Despite Rising Prices October 28, 2021--The European Central Bank decided to keep its emergency purchase program in place, even though the economy is recovering and prices are rising. The decision lets the central bank continue its policy of purchasing financial assets and keeps interest rates in negative territory. That is in spite of an inflation rate of 3.4 percent, which is higher than the target of 2 percent. The Euro's short-term interest rate hovers below zero at -0.573 percent. Meanwhile, the 10-year government bond is also in negative territory at -0.16 percent. The EBC dismissed rising inflation, saying, "This is mainly because oil, gas and electricity prices have gone up a lot and demand is rising faster than supply. But we ex...
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Setting Standards For Global Infrastructure Projects
27Oct By Patti MohrNo Comments
Global Economics, Types of News: Brief

Setting Standards For Global Infrastructure Projects

October 26, 2021—The U.S. State Department, along with the governments of Japan, Australia, and the OECD, are developing criteria and standards for evaluating global infrastructure projects. The Blue Dot Network, as it is known, is a voluntary reporting program meant to encourage private-sector financing in infrastructure projects that align with Paris Agreement climate goals. "Think of it as a Good-Housekeeping certificate," said Jose W. Fernandez, a State Department head of the Economic Growth, Energy, and the Environment branch. "It's designed to enable investors to more easily identify and certify investment-worthy projects."  A Globally Recognized Symbol Fernandez said a goal of the certification is to attract financers into worthwhile projects. He spoke with Stuart H...
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‘Debt Doesn’t Matter,’ Treasury Secretary Yellen Tells Senate Committee
28Sep By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Finance, Investing, Global Economics, Types of News: Brief, United States

‘Debt Doesn’t Matter,’ Treasury Secretary Yellen Tells Senate Committee

September 28, 2021—It's been 20 years since Vice President Dick Cheney asserted to the world and the U.S. Congress that "deficits don't matter." Today, Treasury Secretary Janet Yellen asserted a similar sentiment when asked about the overall size of the debt. In an exchange with Sen. Mike Rounds, R-SD, Yellen said it is the interest cost of the debt, which is virtually zero, is all that matters. "When do we have to say, 'Enough is enough' when it comes to our deficit and our debt?" Rounds asked. Yellen responded that "there are different metrics" for looking at the level of debt. One is the debt-to-GDP ratio. "We are a little bit over 100 percent," she added, "which has traditionally been regarded as high." But rather than use that metric to examine the debt level, Yellen s...
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Investors in Asia Embracing New Sustainable Technologies
24Aug By Frank McMullinNo Comments
Climate Action, ESG, Sustainable Finance, Finance, Investing, Global Economics, Types of News: Brief

Investors in Asia Embracing New Sustainable Technologies

Photo of Shanghai by Alexander Schimmeck courtesy Unsplash. CONFERENCE COVERAGE: Talks Show Investors Pivoting To 'Purposeful' Portfolios August 24, 2021--Leaders from financial investment firms, consulting agencies, nonprofits and startups met virtually last week to spur collaborations and sustainable investments in Asia. The South China Morning Post’s held the event, called Asia Sustainability Conference. As investors continue to flock to rapidly-developing markets in Asia, the conference reflected growing demand for investment opportunities in line with environmental, social, and corporate governance criteria. "Going forward, we are all equal. There is so much pressure to look at sustainable investments that, with new investments, we are on par with the rest of the world," s...
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IMF Making $650 Billion Available to Members On Monday
20Aug By Patti MohrNo Comments
Global Economics, Organizations, IMF, WTO, G7, Types of News: Brief

IMF Making $650 Billion Available to Members On Monday

Fund Blocks Afghanistan And Venezuela From Benefitting From Special Drawing Right In an emergency decision, the IMF is creating reserves for nearly all members. Countries can exchange it for cash or keep as reserves. August 20, 2021--The International Monetary Fund is set to make available $650 billion in drawing rights on August 23 to nearly all of its 190 members. Creating Cash through Special Drawing Rights It's a historic distribution by the fund, made to mitigate the impact of the global pandemic. The IMF executive board approved the emergency decision in July. IMF members will be able to exchange the Special Drawing Right for hard currency with central banks of countries. They could also keep it as part of their reserves. The allocation is neither a donation nor a ...
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