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On the agenda today we have Federal Reserve Bank of San Francisco President Mary Daly participating in a ‘fireside chat’ at a conference co-sponsored by the Federal Reserve Bank of Dallas and Federal Reserve Bank of Atlanta. Federal Reserve Board Governor Michelle Bowman will speak at the same event later, on “Accountability and Reform”.
Also on the session is June inflation data from Japan. All three of the measures (screenshot below) are expected to remain above the Bank of Japan’s 2% target. However, the BoJ is dissatisfied with the nature of the inflation in Japan. Higher inflation, says the BoJ, is mainly due to ‘cost-push’ inflation pressure from rising input prices and the weak yen. The BoJ want ‘demand-pull’ inflation from consumers increasing spending after wage rises. They are still waiting for that as the wage boosts seen in spring feed through. The Bank is under pressure to normalize policy further so they may have to become less fussy on the nature of the inflation they are seeing. The BoJ next meet on July 30 and 31 and a plan on further trimming JGB buys is expected.
ps. More on cost-push and demand-pull below under the calendar.
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Cost-push inflation and demand-pull inflation are two types of inflation that arise from different economic factors. Here’s a comparison between the two:
Causes:
Key Drivers:
This article was written by Eamonn Sheridan at www.forexlive.com.
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