Inflation
The April flash PMIs show that the global energy shock is feeding through unevenly, with sharper price pressures outside the US. Longer delivery times were widespread across developed markets, and input prices rose. One of our most timely tools for tracking…
Our clients see US core inflation remaining above the Fed’s 2% target for the remainder of the year. In last week’s poll, opened April 20, we asked our clients and social media users their base case for core PCE by year-end. An overwhelming 83% of BCA clients…
The April flash PMIs show the US weathering the energy shock better than the rest of the world, especially Europe. Global growth is slowing in the face of higher energy costs. Manufacturing beat estimates across the board, helped by longer delivery times and…
The Turkish Central Bank held rates at 37% this week, in line with expectations. While the energy shock may halt disinflation and delay near-term CBRT easing, the structural background remains disinflationary. An easing pause coupled with a slowing domestic…
In the US, the oil shock’s impact is more inflationary than recessionary but in the other economies, like the UK, the impact is both inflationary and recessionary. This creates relative value opportunities for bond investors. Plus, we reiterate short AUD/JPY as a trade.
Kevin Warsh’s confirmation hearing focused on how he would conduct policy, not on committing to a specific policy path. While the Fed Chair nominee avoided committing to a specific rate path, some of his comments on the conduct of policy are worth…
The Bank of Canada’s 2026 Q1 Business Outlook Survey improved, but the domestic economy still had slack before the energy shock. The Q1 survey saw the headline index rising to -0.4 from -1.8 in Q4 of last year. The future sales index jumped to 25 from 13 and…
Our Global Investment strategists see the oil shock's inflationary impact as short-lived. Near-term headline inflation will rise as energy prices filter through, but labor market slack and decelerating wage growth keep the risk of unanchored expectations low.…
The April Philly Fed survey beat estimates and pointed to resilient manufacturing activity despite the energy shock. The headline index rose to 26.7 from 18.1. New orders and shipments were strong and both increased. Labor signals were mixed, as the…
We do not expect the oil shock to have a lasting effect on inflation. Looking further out, a variety of structural forces will influence inflation, including fiscal policy, globalization, demographics, and AI.