by Jana Randow, Katia Dmitrieva and Enda Curran
The Japan Times
The more U.S. President Donald Trump threatens tariffs on U.S. trading partners, the more the worry of another inflation wave troubles global economists.
Stubborn growth in consumer prices was bothering much of the world even before Trump entered the White House. With this week’s measures against China offering the first concrete evidence that he isn’t just jawboning, prospects for at least some escalation and countermeasures elsewhere are forcing analysts to question how far global disinflation can hold.
“Tariff wars are inflationary, that’s not up for debate,” said Carsten Brzeski, ING’s global head of macro research. “In many places, they add to lingering effects from the past inflation shock, as well as big structural challenges” like aging societies and climate change, he said. “There are currently only very few reasons to expect inflation to remain permanently low.”
After several years of aggressive salary growth combined with talent shortages, effective leaders around the world are now recalibrating their approaches in response to a shifting economic landscape.
Disney’s traditional television business continues to decline with operating income at so-called linear networks dropping sharply by 11 percent to $1.1 billion in the last financial quarter.
The Russian Central Bank’s decision to raise interest rates to their highest level in two decades has so far failed to slow rising inflation, the regulator acknowledged in a bulletin published Wednesday.
Over the past three decades, Japan’s monetary policy has been characterized by near-zero interest rates and significant quantitative easing (QE), aimed at countering persistent deflation and stimulating economic growth. The outcome of decades of accommodative policies has resulted in the Bank of Japan (BOJ) accumulating a balance sheet equivalent to 125 percent of Japan’s GDP — a ratio that surpasses any other major central bank. Japanese government bonds (JGBs) dominate the balance sheet, accounting for over three-quarters of the total; more than half of Japan’s outstanding government debt is held on the BOJ’s balance sheet.
The Federal Reserve’s preferred inflation measure accelerated slightly in December, as price growth remains stubbornly above the central bank’s goal.
U.S. stocks closed lower after the Federal Reserve left interest rates unchanged and took a less confident view on inflation, and chip darling Nvidia renewed its slide on a report President Donald Trump’s considering restricting the company’s sales to China.
PepsiCo said Tuesday that high prices and changing consumer tastes have weakened U.S. demand for its snacks and drinks but it’s confident it can turn that around in the coming year.
Tired of the constant gift guides and endless grocery store receipts, Americans are cutting down on spending. “No buy” challenges have taken off in the past couple of years, gaining traction on social media platforms like Instagram and TikTok, which previously served as showcases of consumption. Now a strict budgeting lifestyle is the way to go for people who are tired of inflation, constant decluttering, and dread that Trump’s tariffs will make essentials even more expensive.