The US Federal Reserve should consider pivoting away from its aggressive monetary policy actions as financial conditions have tightened drastically to bring inflation down, the Institute of International Finance (IIF) said.
This emphasis on spot inflation and other data has conditioned markets to react violently to instances where data releases are meaningfully different from consensus, the Washington-based institute said in a report on Friday.
Spot data is derived from actual prices and the IIF said that historically, monetary policy has always been forecast-based, whereby policymakers target inflation two years ahead.
With the sharp rise in US inflation, this forecast-based approach has, at least to some degree, given way to the reaction to spot inflation and other data, it said.
"It is possible that financial conditions have already tightened sufficiently to bring inflation down on a two-year horizon, so reacting to spot data may raise the risk of a hard landing," the IIF economists said.
"It is, therefore, better not to react too much to the ongoing data flow ... this is why a Fed pivot to a slower pace of hikes is warranted in September. Such a pivot would also be consistent with longer-term inflation expectation."
The IIF also cited the latest US jobs report and the dollar's strong jump in reaction as one of the reasons spot data carries risks. US job growth surged in July, as the economy added 528,000 positions, defying all expectations of a slowdown.
The IIF said the the shift was on "full display" in June when Fed chairman Jerome Powell linked the acceleration of Fed hikes to higher-than-expected inflation for May and and rising inflation expectations".
"Financial conditions have tightened drastically, especially in housing, and — more fundamentally — data have gotten noisier in the Covid recovery, so it is not clear to us that high-frequency data surprises carry much information, IIF economists said.
Putting a greater emphasis on forecasts rather than on spot data will mean "it is time for the Fed to pivot — slow the pace of monetary policy tightening going forward", they said.
In July, the US said its economy had shrunk for a second quarter in a row, a “technical recession” according to commonly followed definition, as record-high inflation and aggressive interest-rate increases by the Fed hit businesses and housing demand.
The central bank last month raised interest rates by three quarters of a percentage point, which was its third increase in three months and the biggest since 1994 after inflation climbed again in May, jumping 8.6 per cent on an annual basis.
The rate of inflation, however, eased in July, with falling petrol prices providing some relief for Americans.
Consumer confidence in the housing market, meanwhile, fell to its lowest level since 2011, the mortgage association Fannie Mae said this week.
The IIF last month warned that a risk of a global recession is “rising sharply” amid a combination of shocks, including the effects of the Russia-Ukraine conflict on the eurozone, Covid-19 pandemic-related uncertainty in China and the sharp tightening in US financial conditions.
The global economy is projected to grow 2.3 per cent in 2022, compared with an earlier 4.6 per cent estimate, the IIF said in a May 26 report. It also cut its growth forecast for the eurozone this year to 1 per cent from an earlier 3 per cent estimate, saying it was a “recession call”.
The specs: 2018 Nissan Altima
Price, base / as tested: Dh78,000 / Dh97,650
Engine: 2.5-litre in-line four-cylinder
Power: 182hp @ 6,000rpm
Torque: 244Nm @ 4,000rpm
Transmission: Continuously variable tranmission
Fuel consumption, combined: 7.6L / 100km
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
Family reunited
Nazanin Zaghari-Ratcliffe was born and raised in Tehran and studied English literature before working as a translator in the relief effort for the Japanese International Co-operation Agency in 2003.
She moved to the International Federation of Red Cross and Red Crescent Societies before moving to the World Health Organisation as a communications officer.
She came to the UK in 2007 after securing a scholarship at London Metropolitan University to study a master's in communication management and met her future husband through mutual friends a month later.
The couple were married in August 2009 in Winchester and their daughter was born in June 2014.
She was held in her native country a year later.
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The Details
Article 15
Produced by: Carnival Cinemas, Zee Studios
Directed by: Anubhav Sinha
Starring: Ayushmann Khurrana, Kumud Mishra, Manoj Pahwa, Sayani Gupta, Zeeshan Ayyub
Our rating: 4/5
Arsenal's pre-season fixtures
Thursday Beat Sydney 2-0 in Sydney
Saturday v Western Sydney Wanderers in Sydney
Wednesday v Bayern Munich in Shanghai
July 22 v Chelsea in Beijing
July 29 v Benfica in London
July 30 v Sevilla in London
The specs
Engine: 6.2-litre supercharged V8
Power: 712hp at 6,100rpm
Torque: 881Nm at 4,800rpm
Transmission: 8-speed auto
Fuel consumption: 19.6 l/100km
Price: Dh380,000
On sale: now
Scoreline
Ireland 16 (Tries: Stockdale Cons: Sexton Pens: Sexton 3)
New Zealand 9 (Pens: Barrett 2 Drop Goal: Barrett)
Results
Male 51kg Round 1
Dias Karmanov (KAZ) beat Mabrook Rasea (YEM) by points 2-1.
Male 54kg Round 1
Yelaman Sayassatov (KAZ) beat Chen Huang (TPE) TKO Round 1; Huynh Hoang Phi (VIE) beat Fahad Anakkayi (IND) RSC Round 2; Qais Al Jamal (JOR) beat Man Long Ng (MAC) by points 3-0; Ayad Albadr (IRQ) beat Yashar Yazdani (IRI) by points 2-1.
Male 57kg Round 1
Natthawat Suzikong (THA) beat Abdallah Ondash (LBN) by points 3-0; Almaz Sarsembekov (KAZ) beat Ahmed Al Jubainawi (IRQ) by points 2-1; Hamed Almatari (YEM) beat Nasser Al Rugheeb (KUW) by points 3-0; Zakaria El Jamari (UAE) beat Yu Xi Chen (TPE) by points 3-0.
Men 86kg Round 1
Ahmad Bahman (UAE) beat Mohammad Al Khatib (PAL) by points 2-1
Men 63.5kg Round 1
Noureddin Samir (UAE) beat Polash Chakma (BAN) RSC Round 1.
Female 45kg quarter finals
Narges Mohammadpour (IRI) beat Yuen Wai Chan (HKG) by points.
Female 48kg quarter finals
Szi Ki Wong (HKG) beat Dimple Vaishnav (IND) RSC round 2; Thanawan Thongduang (THA) beat Nastaran Soori (IRI) by points; Shabnam Hussain Zada (AFG) beat Tzu Ching Lin (TPE) by points.
Female 57kg quarter finals
Nguyen Thi Nguyet (VIE) beat Anisha Shetty (IND) by points 2-1; Areeya Sahot (THA) beat Dana Al Mayyal (KUW) RSC Round 1; Sara Idriss (LBN) beat Ching Yee Tsang (HKG) by points 3-0.
Company%20profile
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MATCH INFO
Barcelona v Real Madrid, 11pm UAE
Match is on BeIN Sports
Challenge Cup result:
1. UAE 3 faults
2. Ireland 9 faults
3. Brazil 11 faults
4. Spain 15 faults
5. Great Britain 17 faults
6. New Zealand 20 faults
7. Italy 26 faults
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Red Joan
Director: Trevor Nunn
Starring: Judi Dench, Sophie Cookson, Tereza Srbova
Rating: 3/5 stars
Results
6.30pm: Maiden Dh165,000 (Dirt) 1,200m
Winner: Barack Beach, Richard Mullen (jockey), Satish Seemar (trainer).
7.05pm: Handicap Dh170,000 (D) 1,200m
Winner: Way Of Wisdom, Connor Beasley, Satish Seemar.
7.40pm: Maiden Dh165,000 (D) 1,900m
Winner: Woodditton, Connor Beasley, Ahmad bin Harmash.
8.15pm: Handicap Dh185,000 (D) 2,000m
Winner: Secret Trade, Sandro Paiva, Ali Rashid Al Raihe.
8.50pm: Handicap Dh185,000 (D) 1,600m
Winner: Mark Of Approval, Antonio Fresu, Mahmood Hussain.
9.25pm: Handicap Dh165,000 (D) 2,000m
Winner: Tradesman, Pat Dobbs, Doug Watson.
INDIA%20SQUAD
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