Latest news with #monetary stability
Wall Street Journal
3 days ago
- Business
- Wall Street Journal
‘Inflation' Review: The Price of Cheap Money
Inflation is both a remarkably complex and extremely simple phenomenon. The complexity lies in the variety of circumstances that typically accompany its appearance. These may include an energy or some other kind of supply shock, acute social conflict, excessive government indebtedness, fiscal profligacy or a collapse in the value of the currency on the foreign exchanges. Yet none of these factors necessarily result in the loss of monetary stability. Then there's the straightforward explanation for inflation, succinctly expressed by Milton Friedman: 'too much money chasing too few goods.' An extraordinary increase in the money supply is both a necessary and sufficient condition for inflation. The monetarist theory of inflation dates back at least 500 years and can be found in the 16th-century writings of Copernicus and the French jurist Jean Bodin. There has never been an inflationary period that wasn't accompanied by an above-average monetary expansion. The most remarkable aspect of Mark Blyth and Nicolò Fraccaroli's 'Inflation: A Guide for Users and Losers' is that the simple, theoretically robust and historically validated monetarist theory is nearly ignored, while the contingent circumstances that often but don't always accompany inflation are vested with causal power. Thus, the recent bout of inflation is explained in terms of the supply shock induced by the Covid-19 pandemic and Russia's 2022 invasion of Ukraine, which led to a brief escalation of energy prices. Never mind that Friedman himself pointed out that the two oil shocks of the 1970s could not have resulted in a widespread inflation without central banks accommodating them with loose monetary policies. Had the money supply remained fixed, the Chicago economist reasoned, there would have been a shift in relative prices—higher for energy and lower for most other goods—but no rise in the general price level.
Zawya
30-07-2025
- Business
- Zawya
Mideast Stocks: Gulf stocks gain on earnings optimism, ahead of US Fed outlook
Major Gulf equities rebounded in volatile trade on Wednesday as investors shrugged off underwhelming earnings and rotated into selective buying ahead of key corporate results and the U.S. Federal Reserve's policy decision, due later in the day. While the Fed is widely expected to hold interest rates steady, the possibility of dovish dissent has provided a measure of optimism. The Fed's stance holds significant implications for Gulf economies, where most currencies are pegged to the U.S. dollar, making it a key anchor for regional monetary stability. Saudi Arabia's benchmark index <.TASI> picked up 0.8% driven by broad sector gains and investor enthusiasm ahead of major earnings announcements from SABIC < and Aramco < due next week. Halwani Brothers < showed sharp intraday volatility, dropping nearly 5% after reporting a significant quarterly profit decline, before rebounding to close up by over 4%, reflecting a mix of sell-offs, bargain hunting and short-covering. Dubai's benchmark index <.DFMGI> rose 0.5% to hit over a 17-1/2-year high, logging its sixth straight session of gains, as hopes remain high ahead of key earnings, mainly from the real estate sector. Gains were driven by a 1.5% jump in toll operator Salik maintaining the same stretch of wins. The Abu Dhabi index <.FTFADGI> gained 0.1%, lifted by selective buying amid a mixed but largely encouraging earnings season. ADNOC Drilling advanced 1%, boosted by solid growth and a confident full-year outlook. Shares of Emirates Telecommunications Group(e&) added nearly 1.5%, as the telecom giant is slated to report its quarterly earnings on Thursday. Qatar's stock index <.QSI> bounced back 0.1%, recovering from two sessions of profit-taking, as optimism builds ahead of heavyweight earnings announcements. Beyond earnings, market sentiment remains focused on global trade developments ahead of the August 1 U.S. tariff deadline. Following two days of negotiations, the U.S. and China agreed to seek an extension of their 90-day tariff truce, set to expire on August 12. Meanwhile, South Korea was also lobbying to secure a trade deal as its officials met U.S. Commerce Secretary Howard Lutnick in Washington. While concerns linger over the impact of tariff policies on global growth and energy demand, the latest developments have helped bolster confidence in the resilience of oil-dependent Gulf economies. Outside the Gulf, Egypt's blue-chip index <.EGX30>, eased 0.7%, as investors locked in profits following a recent record peak. Talaat Moustafa Group fell 1.1%. (Reporting by Amna Mariyam in Bengaluru; Editing by Vijay Kishore)
