Inflation everywhere:
China's Inflation Accelerates: The consumer-price index, meanwhile, rose by 5.4% from a year earlier in March, up from 4.9% in February and the fastest pace since July 2008. Economists had expected a 5.3% rise. China's leaders have said repeatedly that taming consumer prices is their top economic priority this year. They have taken a long series of measures in that fight, including four interest-rate increases since October...China's producer-price index, a measure of wholesale factory prices that can be a leading indicator of inflation pressures, rose 7.3% from a year earlier in March... online.wsj.com
India's inflation accelerated sharply in March firming expectations of a rate hike by the central bank next month, even as a top government official acknowledged policy steps so far haven't yielded the anticipated results. The wholesale price index rose 8.98% in March from a year earlier... online.wsj.com
U.S. and euro zone inflation were at identical 2.7% annual rates in March... ...Yet given the same set of inflation dynamics, the European Central Bank has already raised interest rates once and, based on Friday’s report, is likely to do so again as early as June. The Federal Reserve, in contrast, continues to pump money into the economy via QE2, and isn’t expected to lift interest rates from near zero for many months... blogs.wsj.com
my comment: Stock valuations fall as inflation and interest rates rise. Hard assets do the best, as long as demand holds up, but then they fall too, and just as hard. The U.S. used to be the center of the global economy, but the center is shifting across the Pacific. The longer the U.S. continues QE and 0% interest rates, in the face of rising prices for everything, the greater the correction when they stop. |
