Author: Bank of Valletta

Germany’s producer prices increased at an annual growth rate of 8.5 per cent in June over the same period last year, the Federal Statistical Office (Destatis) reported on Tuesday. This is the highest year-on-year increase since January 1982. Compared to May, producer prices rose by 1.3 per cent in June. Excluding energy, producer prices advanced six per cent in June from the same period last year. Energy prices climbed 16.9 per cent year-on-year in June and were “mainly responsible” for the increase of producer prices, Destatis said. The year-on-year increase in energy prices was “mainly caused by a base effect…

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The Federal Reserve’s latest Beige Book, which gathers anecdotal information on the current state of the US economy, confirmed that it was growing faster through early July, but the recovery is being restrained by widespread shortages of labour and supplies. Prices were also strong, rising “at an above-average pace,” the Fed said, with its business contacts apparently uncertain that higher inflation would fade soon. Overall, the US economy was described as displaying “moderate to robust growth”, marking the report’s most optimistic overall characterisation of the economy since early 2018. However, it noted a heightened sense of concern among businesses that…

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Federal Reserve (Fed) officials talked about asset purchase tapering at their most recent meeting, but few seemed in a hurry to get the process going, according to the minutes released on Wednesday. The Federal Open Market Committee’s June 15-16 meeting summary provided only a few new glimpses into talks about when the central bank should begin reducing the pace of its bond purchases. Some members indicated that the economic recovery was proceeding faster than expected and was being accompanied by an outsized rise in inflation, both making the case for taking the Fed’s foot off the policy pedal. However, the…

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Federal Reserve (Fed) policymakers on Wednesday considerably raised their expectations for inflation this year and signalled they expect to raise interest rates by late 2023, sooner than they anticipated in March, as the economy recovers rapidly from the effects of the pandemic and inflation heats up. However, the central bank gave no indication as to when it will begin cutting back on its aggressive bond-buying programme, although Fed chairman Jerome Powell acknowledged that officials discussed the issue at the meeting. The forecast for higher rates in 2023 comes as the median estimate for gross domestic product growth in the year…

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