Core inflation refers to the change in the cost of goods and services excluding the food and energy sectors. These items are not included in our estimate of inflation since their prices are significantly more unpredictable. The consumer price index (CPI), which is a measure of prices for goods and services, is most commonly used […]
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Futures are significant tools for hedging and managing various types of risk. Foreign-trade companies utilize futures to manage foreign exchange risk, interest rate risk (by locking in a rate in expectation of a rate drop if they have a large investment to make), and price risk (by locking in prices of commodities such as oil, […]
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The adjective “transitory” has a good possibility of becoming one of the words of the year in 2021. At least, that’s the consensus among central bankers and analysts. While Federal Reserve Chair Jerome Powell recently revised his view that the current US inflation rate of 6.8% is a “transitory” phenomenon, fueling speculation about an impending […]
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Y = C + I + G + X + Z Net Income (Z) (Net income inflow from abroad minus net income outflow to foreign countries) The production of physical commodities such as automobiles, agricultural products, machinery, and other machinery, as well as the provision of services such as healthcare, business consulting, and education, are […]
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The worldwide foreign currency market has an average daily trading volume of approximately $5 trillion dollars. Standardized futures contracts to buy or sell currency at a specific date, time, and contract size are known as forex futures. Futures contracts are publicly traded, non-customizable (standardized in contract size and settlement methods), and credit losses are covered […]
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Stagflation is defined as a period of poor economic development and relatively high unemploymentor economic stagnationalong with rising prices (i.e. inflation). Stagflation is described as a period of high inflation that coincides with a drop in the gross domestic product (GDP). What are the components of stagflation? Stagflation is a term that combines the terms […]
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According to the Bureau of Economic Analysis’ “third” estimate, real gross domestic product (GDP) increased at an annual rate of 2.2 percent in the fourth quarter of 2018 (table 1). Real GDP climbed by 3.4 percent in the third quarter. The most recent GDP estimate is based on more extensive source data than the “initial” […]
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How Companies Charge More Without Raising Prices (Hidden Inflation). Companies are figuring out how to charge customers more without raising retail prices. Gabriel T. Rubin, a reporter for the Wall Street Journal, joins host J.R. Whalen to talk about how extra fees and surcharges add up to “hidden inflation.” What is deflationary repression? Repressed inflation […]
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E-mini S&P futures (ES) allow traders to profit from their predictions of where the S&P 500 index will go in the future. ES futures, unlike equities, trade at practically all hours of the day and night from Sunday to Friday. Day traders choose these goods because of their extended trading hours and liquidity. Do futures […]
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Some countries have had such high inflation rates that their currency has lost its value. Imagine going to the store with boxes full of cash and being unable to purchase anything because prices have skyrocketed! The economy tends to break down with such high inflation rates. The Federal Reserve was formed, like other central banks, […]
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