Daily update
Daily update
- US data on income and spending confirms that the US consumer has money and is prepared to spend it. There was not, perhaps, much doubt of the latter point. US living standards continuously reach new highs (at least as measured in economic terms). The personal consumer expenditure deflator offered no surprises with regard to inflation—though it did show that inflation was more driven by supply problems than demand (according to Federal Reserve analysis).
- ECB President Lagarde gave an extraordinary political interview, urging European chequebook diplomacy to avert a trade war with the US. This may or may not work, but it is very far from the remit of an independent central banker (supposedly focused on financial stability and inflation control). It matters, if it undermined the political neutrality of the ECB.
- Spanish and German preliminary November inflation figures are both expected to show some increase in the headline rate, but are still hovering close to 2%. On a roughly similar measure, US inflation is just below 2%. This is what price stability generally looks like.
- There are still more ECB speakers—with the noise level recently, it is hard to imagine anything new coming out of this, especially with Lagarde’s political comments generating all the headlines.
