
Chile's Annual Inflation Unexpectedly Speeds Up After Rate Cut
Annual inflation sped up to 4.3% in July, above all estimates in a Bloomberg survey that had a 4% median forecast. On the month, prices rose 0.9%, also above all projections, the national statistics institute reported on Friday.
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Bloomberg
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Thai King Endorses Vitai's Appointment as Bank of Thailand Chief
Thailand's King Maha Vajiralongkorn has endorsed the appointment of Vitai Ratanakorn as the nation's new central bank governor, more than two weeks after the cabinet picked the seasoned banker for the coveted role. The royal endorsement caps a monthslong selection process that has been overshadowed by concerns over government attempts to erode the autonomy of the Bank of Thailand. Vitai is set to take office from Oct. 1, according to a Royal Gazette notification issued Sunday. Incumbent Governor Sethaput Suthiwartnarueput is due to complete his five-year term on Sept. 30.


Bloomberg
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Egyptian Inflation Cools for a Second Month as Rate Cuts Weighed
Egypt inflation slowed for a second month, potentially giving the North African nation scope to resume a monetary-easing cycle. Consumer prices in urban areas grew an annual 13.9% in July versus 14.9% the month before, Egypt's main statistics body said Sunday. On a monthly basis, there was deflation of 0.5%, versus a 0.1% contraction in June.


New York Times
3 hours ago
- New York Times
There Is a Specter Haunting Trump's Economy: Stagflation
Since President Trump took office, economists have been waiting for his policies to work their way through the U.S. economy and reveal their consequences. The soft data, mostly surveys of consumers and businesses that track how people feel about the economy, turned down sharply months ago, while the hard data — jobs, G.D.P. growth, inflation — all seemed fine. But recently, a telling series of hard economic data rolled in that has rightfully raised alarm bells about slowing growth and increased inflation — a dreaded economic combination known as stagflation. Mr. Trump's tariffs are now clearly fueling inflation, particularly in goods such as home appliances, cars and food. In the first six months of the year, real (that is, inflation-adjusted) consumer spending, the main driver behind business cycles and robust economic expansion, barely grew, after rising 3 percent last year. G.D.P. growth slowed by about half, to 1.2 percent this year from 2.5 percent last year. When overall growth falls that sharply, the labor market tends to follow, which is precisely what happened: Job growth, at 35,000 per month on average between May and July, is dangerously close to stall speed. While presidents always take credit for good economic news and try to deflect bad news (in this president's case, by firing the messenger who delivered it), it's often hard to link what's going on in the economy to the current administration. Not this time. Whether it's historically high tariffs that never quite seem to stabilize, deportations that threaten to seriously disrupt labor supply in sectors like construction and health services, or a reverse-Robin Hood, budget-busting bill that takes money away from those most likely to spend it, Mr. Trump's policies have pushed economic uncertainty to levels last seen during the onset of the pandemic. This uncertainty has damped investment, hiring and consumption, while the tariffs increase prices. In other words: stagflation. For many American adults, the specter of stagflation may conjure thoughts of the 1970s. But if Mr. Trump's stagflation continues to grow, it will be different in one very important way: The economic damage will be almost entirely self-inflicted. In the '70s, stagflation was caused not by an unconstrained president but by 'exogenous shocks,' meaning big, unexpected disruptions originating from events outside the country and exacerbated by the inaction of the Federal Reserve to offset them. The biggest, and most famous, of these shocks involved the oil market. Because of the oil embargo the Organization of Arab Petroleum Exporting Countries imposed on the United States in 1973 and the Iranian Revolution in 1979, the price of oil increased more than tenfold. As a result, by 1980, the United States was spending roughly six times as much on oil as it was in 1970. That change reverberated throughout the economy and caused inflation to reach a high of nearly 15 percent by the end of the decade. In what is now a famous horror story of monetary policy gone wrong, the Fed not only failed to respond to the rising inflationary pressures in the '70s; it actively made them worse. The reason was in part political: Arthur Burns yielded to pressure from the Nixon White House to disregard concerns about rising inflation and keep interest rates low to hold down unemployment. (Sound familiar?) The resulting stagflation crisis ended only when a new Fed chair, Paul Volcker, raised rates to almost 20 percent in 1980, leading to a deep and painful recession. Want all of The Times? Subscribe.