The central banks of rich countries are preparing to lower their key interest rates, but a series of surprisingly hot inflation readings suggests the U.S. Federal Reserve may be a laggard.
In many rich countries, inflation rates have been in decline since the final months of 2022, and central bankers are becoming more confident that they will reach their targets and stay there, but have yet to be confident enough to make the first move.
Suspense Builds for Fed as Growth Downshifts and Inflation Lingers
A mixed set of economic data over the past week delivered a whiff of the dreaded S-word: Stagflation. But only a whiff.
First, consumer price inflation in February came in slightly higher than expected. Then retail sales for the month disappointed, with a downward revision to January as well, and February producer prices also came in on the warm side. On Friday, a preliminary reading from the University of Michigan's consumer sentiment survey showed a decline to 76.5 in March from 76.9 previously, against expectations for a slight rise.
Gold Miners, Enjoying Record Prices, Are Wary of Hedging Their Bets
Record-high gold prices are driving big deals and investments in new mines. What they aren't doing is making companies hurry to lock in prices as protection against the market suddenly turning down.
Hedging-a practice that helps to guarantee a certain price for future output-is common among producers of commodities ranging from copper to natural gas. But it has been eschewed by the gold-mining industry after companies got caught on the wrong side of trades made during previous bull runs by the precious metal. In 2009, Canadian giant Barrick Gold bought out unprofitable hedges at a cost of more than $5 billion.
Trump Economic Advisers Float Three Names for Fed Chair
WASHINGTON-Influential economic advisers to Donald Trump presented the former president with a shortlist of potential candidates to lead the Federal Reserve during a meeting at his Mar-a-Lago club in Florida last week, according to people familiar with the matter.
In the Thursday meeting, Steve Moore and Arthur Laffer, who have long advised Trump on economic issues, recommended three candidates: Kevin Warsh, an economic-policy adviser to President George W. Bush who later served on the Fed's board of governors; Kevin Hassett, a former chairman of the Council of Economic Advisers during the Trump administration, and Laffer himself. Laffer, an economic adviser to former President Ronald Reagan, is one of the founding theorists of supply-side economics and a champion of the 2017 tax cuts Trump signed into law.
Pakistan Carries Out Airstrikes Inside Afghanistan
ISLAMABAD, Pakistan-Pakistan carried out airstrikes Monday inside neighboring Afghanistan, the Taliban administration in Kabul said, following a weekend of attacks inside Pakistan which the authorities blame on militants based across the border.
A Pakistani security official said that Pakistan's air force hit seven hide-outs of Tehreek-e-Taliban Pakistan in at least three provinces in Afghanistan. Over a dozen airstrikes were carried out, according to the Pakistani official.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
03-18-24 0654ET
