Daily update
Daily update
- The New York Federal Reserve survey of inflation expectations is of little economic relevance, but may be of future political interest. Inflation expectations are skewed towards prices of high frequency purchases (food and fuel). Trade tariffs, as a sales tax, increase prices paid by US consumers—but generally for lower frequency purchases. As such, the impact on living standards may be greater than the impact on perceived inflation.
- There are several Federal Reserve speakers today. Markets expect the Fed to cut rates again in December (which would mean the decline in interest rates matches the decline in inflation this year). Longer term, the Fed is unlikely to conduct policy today in anticipation of policies that are not yet certain.
- Financial markets are looking at US President-elect Trump’s cabinet proposals for a sense of policy priorities. The relatively high turnover of cabinet officials in the previous Trump administration mean appointments now may not signal a permanent policy position.
- The COP29 climate change summit continues—US energy company Exxon has urged that the US remain part of the Paris climate accord. That position perhaps reflects the breadth of focus on sustainability. The demographics of the forthcoming great wealth transfer suggest that private capital is likely to remain focused on the topic.
