INFLATION (FINANCE)

Rates must stay high ‘into next year’: Carney

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Original article by John Kehoe
The Australian Financial Review – Page: 4 : 14-Jun-23

Former Bank of England governor Mark Carney has downplayed the prospect that official interest rates will be reduced in the near-term. Carney has warned that interest rates in Australia and abroad will need to remain high until well into 2024 in order to bring inflation under control. He adds that a "very robust" banking system means that Australia is much better placed to cope with higher interest rates than some countries. The Reserve Bank of Australia has flagged further interest rate rises in coming months as it seeks to restore inflation to the target range of 2-3 per cent.

CORPORATES
BANK OF ENGLAND, RESERVE BANK OF AUSTRALIA

No sign of breakout in inflation: King

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Original article by Adam Creighton
The Australian – Page: 13 & 16 : 20-Apr-20

The Reserve Bank of Australia has been actively buying state and federal government bonds in response to the coronavirus crisis. Former Bank of England governor Mervin King contends that the risk of a sharp rise in inflation will remain low if central banks rather than governments continue to have responsibility for deciding how much money to print. King has also described modern monetary theory as "nonsense", while he has praised regulators in Australia, the UK and New Zealand for advising banks to delay their dividend payments.

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK OF ENGLAND

Low rates may trigger shock

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 3 : 6-Jul-18

Keeping official interest rates low for too long could have dire consequences, according to the Bank for International Settlements’ Committee on the Global Financial System. The committee warns that it could lead to a rise in inflation, which in turn would force central banks to hike up interest rates, resulting in a global recession. Under one scenario put forward by the committee, inflation could rise by two per cent, forcing central banks to lift short-term interest rates by 300 basis points. In Australia, this would result in economic growth falling to 0.5 per cent.

CORPORATES
BANK FOR INTERNATIONAL SETTLEMENTS, RESERVE BANK OF AUSTRALIA

Pimco forecasts slow year but no recession

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 28 : 5-Feb-16

Mihir Worah and Geraldine Sundstrom of Pimco believe that the seven-year bull run is over and volatility will be a characteristic of financial markets in 2016. They also warn that investors can expect a period of lower returns, while the crude oil price is forecast to reach $US50 per barrel by the end of the year. Meanwhile, Pimco forecasts that the global inflation rate will rise to between 1.75 per cent and 2.25 per cent, although it has downplayed the prospect of a recession.

CORPORATES
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC, UNITED STATES. FEDERAL RESERVE BOARD

Forget China, bigger risk for local shares on the horizon

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 35 : 17-Nov-15

Hasan Tevfik of Credit Suisse warns that a rise in the global inflation rate would have a bigger impact on Australian sharemarket investors that an interest rate rise in the US or an economic slowdown in China. Credit Suisse notes that global bond yields would most likely rise if there is a spike in the US inflation rate, while Stephen Walters of JP Morgan expects the global inflation rate to rise after falling to 1.4 per cent in September 2015.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, JP MORGAN AUSTRALIA LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, CAPITAL ECONOMICS LIMITED