Charting the Global Economy: ECB Hikes Despite Banking Turmoil - BLOOMBERG
(Bloomberg) -- The European Central Bank went ahead with a planned half-point increase in interest rates but was silent on what may follow amid market turmoil that roiled Credit Suisse Group AG.
That may give Federal Reserve policymakers the green light to move forward with a rate hike at their upcoming meeting despite the volatility in the aftermath of the collapse of Silicon Valley Bank and First Republic. Underlying US consumer prices rose in February by the most in five months.
Inflation also re-accelerated in Argentina, where annual consumer price growth topped 100% last month. That prompted the country’s central bank to raise its benchmark rate for the first time since September.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
The ECB headlined central bank meetings this week, hiking interest rates despite volatility in the banking sector. Denmark followed, and Argentina raised rates for the first time since September after annual inflation surged above 100% last month. Meantime, Indonesia, Ukraine and Russia held steady while Uzbekistan cut.
Singapore pushed New York off the top spot for the strongest growth in residential rents in the last quarter of 2022, fueled by a supply crunch and strong demand.
The ECB declined to give any steer on the future trajectory of interest rates as concerns over the banking sector simmer both in Europe and the US. After the central bank’s Thursday meeting, some Governing Council members said rates still need to rise while another didn’t want to make a prediction.
Germany’s latest wage settlement echoes another notorious pay deal in the 1970s that heralded years of economic malaise, even though there’s less cause for alarm for now. The new Deutsche Post AG agreement for 160,000 workers features the highest increase of recent accords, and might prove an inspiration for bigger public-sector negotiations — with possible consequences for inflation.
Chancellor of the Exchequer Jeremy Hunt set out major changes to the UK tax and benefit system to encourage businesses to invest, entice people back into work and to pull the economy out of stagnation.
It’s been a chaotic two weeks in US financial markets — after Fed Chair Jerome Powell opened the door to re-accelerating the pace of rate hikes, the failure of SVB and crisis around Credit Suisse quickly saw traders pare back their expectations of how high rates will go.
Underlying consumer prices rose in February by the most in five months, forcing a tough choice for Fed officials weighing still-rapid inflation against banking turmoil in their next interest-rate decision.
Most people enter adulthood feeling broke and spending frugally. Not Gen Z. Spending by the youngest group of US adults has been turbocharged by two once-in-a-generation drivers over the past year: decades-high inflation and a tight job market that has propelled strong wage growth, especially at entry levels.
Argentina’s annual inflation surpassed 100% last month, one of the world’s fastest rates, putting extra pressure on an economy that’s expected to fall into recession ahead of presidential elections this year. Consumer prices rose 102.5% in February from a year ago, the most since late 1991 when the economy was cooling off from 3,000% hyperinflation.
China reported a rebound in consumer spending, industrial output and investment this year after coronavirus restrictions were dropped, while warning of risks to the economy’s recovery as unemployment rose and real estate investment continued to slump.
China’s share of South Korean technology exports fell to the lowest level in more than 13 years, suggesting a reduced reliance on advanced products from Seoul amid a reshaping of global trade flows.
--With assistance from John Authers, Patrick Gillespie, Sam Kim, Isabelle Lee, Joe Mayes, Reade Pickert, Jana Randow, Augusta Saraiva, Zoe Schneeweiss, Fran Wang, Alexander Weber, Sing Yee Ong and Lin Zhu.