{"id":58514,"date":"2021-07-05T19:35:08","date_gmt":"2021-07-06T00:35:08","guid":{"rendered":"https:\/\/olduvai.ca\/?p=58514"},"modified":"2021-07-05T19:35:08","modified_gmt":"2021-07-06T00:35:08","slug":"while-fed-is-in-denial-hawkish-bank-of-russia-sees-inflation-as-not-transitory-warns-of-possible-shock-and-awe-rate-hike","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=58514","title":{"rendered":"While Fed Is in Denial, Hawkish Bank of Russia Sees Inflation as \u201cNot Transitory,\u201d Warns of Possible Shock-and-Awe Rate Hike"},"content":{"rendered":"
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While Fed Is in Denial, Hawkish Bank of Russia Sees Inflation as \u201cNot Transitory,\u201d Warns of Possible Shock-and-Awe Rate Hike<\/a><\/h3>\n<\/header>\n
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US Inflation is almost as hot as in Russia, but the Fed is still blowing it off.<\/strong><\/p>\n

Consumer price inflation in Russia is red-hot, having jumped 6.0% in May compared to a year ago, 2 percentage points above the Bank of Russia\u2019s target of 4.0%. Polls in Russia show that food inflation is a top concern, currently running at 7.4%.<\/p>\n

But inflation in the US isn\u2019t lagging far behind: The Consumer Price Index (CPI)\u00a0jumped 5.0% in May<\/a>. Yet the central banks are on opposite tracks in their approach to inflation.<\/p>\n

Federal Reserve governors keep jabbering about this red-hot inflation being \u201ctemporary\u201d or \u201ctransitory,\u201d and likely to disappear on its own despite huge government stimulus and the Fed\u2019s huge and ongoing monetary stimulus, though some doubts are creeping in among a couple of them. So they\u2019ll keep interest rates at near-zero until at least next year, and they\u2019re still buying $120 billion a month in securities to push down long-term interest rates.<\/p>\n

Russia has been on the opposite trajectory, \u201csurprising\u201d economists at every step along the way. This trajectory started on March 19 with a 25 basis point rate hike, to 4.5%,\u00a0against the expectations of 27 of the 28 economists<\/a>\u00a0polled by Reuters, who didn\u2019t expect a rate hike. On April 23, the Bank of Russia hiked its policy rate by 50 basis points, to 5.0%. On June 11, it hiked by another 50 basis points to 5.5%. The next policy meeting is scheduled for July 23.<\/p>\n

Is a shock-and-awe rate hike next? Bank of Russia Governor Elvira Nabiullina is preparing the markets for this possibility \u2013 so it won\u2019t be a shock, but just awe.<\/p>\n

At the July meeting, the central bank \u201cwill consider\u201d an increase in the range from \u201c25 basis points to 1 percentage point,\u201d she told\u00a0Bloomberg TV<\/a>\u00a0in an interview.<\/p>\n<\/div>\n<\/header>\n

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\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

While Fed Is in Denial, Hawkish Bank of Russia Sees Inflation as \u201cNot Transitory,\u201d Warns of Possible Shock-and-Awe Rate Hike US Inflation is almost as hot as in Russia, but the Fed is still blowing it off. Consumer price inflation in Russia is red-hot, having jumped 6.0% in May compared to a year ago, 2 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1067,124,303,426,431,534,694,827,3650,4254,4255],"class_list":["post-58514","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-russia","tag-central-banks","tag-fed","tag-inflation","tag-interest-rates","tag-monetary-policy","tag-russia","tag-united-states","tag-us-federal-reserve","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58514","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=58514"}],"version-history":[{"count":0,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58514\/revisions"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=58514"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=58514"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=58514"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}