Tag: inflation
From early 2022 to mid-2023, the U.S. Federal Reserve implemented its most aggressive rate hike cycle since the early 1980s, raising the policy interest rate from near-zero levels of 0-0.25% to a range of 5-5.25%. This dramatic shift was aimed at curbing the high inflation rates that had surged...
The Reserve Bank of India (RBI) has the critical task of maintaining price stability while fostering economic growth. In recent years, there has been debate on whether the RBI should focus exclusively on core inflation, which excludes volatile components like food and energy prices. While this approach might seem...
Midway through the year, leaders of some of the world's largest companies are seeing signs of trouble in the two biggest economies. From McDonald's to Mercedes-Benz, executives are reporting that many consumers in China and the U.S. are cutting back on spending. However, the reasons for this decline differ...
The most stringent monetary policy in decades has failed to curb food prices. In 2023-24, the consumer food price index (CFPI) surged by 7.5%, and by the June quarter of 2024, the pace of increase had risen to 8.9%. The reason is simple: food prices are typically driven by...
“There is more than one way to skin a cat,” goes an old English proverb, implying there are various ways to accomplish a task. In central bank parlance, the equivalent might be: “There is more than one way to effect a soft landing,” the elusive goal of central banks...
As Indian Prime Minister Narendra Modi embarks on his third term, the economic landscape presents both opportunities and challenges. Despite losing seats in the recent general election, Modi's re-election signals continued leadership. However, his reliance on allied parties for the first time in his career introduces a new dynamic....
Inflation, defined as the ongoing rise in prices of goods and services, has long been a significant concern for economies worldwide. In the United States, inflation has been particularly problematic, affecting consumer behavior and shaping monetary policy decisions. Following a period of heightened inflation, recent data indicates that the...
In recent discussions about India's economic recovery, the concept of 'K-shaped' growth has garnered considerable attention. This term describes a scenario where different sectors of the economy recover unevenly, leading to disparities in economic outcomes. However, this uneven recovery is not limited to growth alone; it is also evident...
Federal Reserve Chair Jerome Powell's recent congressional testimony hinted at a subtle yet significant change in the central bank's approach to interest rates. Over two days, Powell indicated a potential shift in the Fed's strategy, one that could prove more enduring than the pivot that sparked a significant market...
In October 2020, Jayanth R. Varma and Ashima Goyal joined the Reserve Bank of India's (RBI's) monetary policy committee (MPC). Since their appointments, both have played pivotal roles, often voicing dissenting opinions that have sparked debates about the RBI's monetary policy direction. Varma, initially a hawk, shifted to a...
