(Bloomberg) — Inflation in the U.S. and Europe has fallen, prompting policymakers in both regions to cut interest rates in September.
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On a three-month annualized basis, the Federal Reserve’s preferred measure of underlying U.S. inflation rose 1.7% in July, the slowest pace this year. In Europe, consumer prices rose 2.2% in August from a year ago — the weakest since mid-2021 and well below the 2.6% pace a month earlier.
Meanwhile, inflation in Tokyo, a key indicator of national figures released in September, rose in August, bolstering the case for the Bank of Japan to continue raising interest rates gradually as the bank balances the need to support the economy.
Below are some charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:
US
The Fed’s preferred measure of underlying U.S. inflation rose modestly and household spending expanded in July, bolstering policymakers’ plan to begin cutting interest rates next month. However, slower income growth and a decline in the savings rate could raise questions about the sustainability of consumer spending going forward.
From LA to Chicago to Boston, aging business districts are struggling with empty offices and a slow return of workers, while neighborhoods just miles or blocks away are doing better—or even thriving. Such disparities are unfolding across the U.S., exposing deep rifts in the commercial real estate market and cities’ post-pandemic recovery.
Americans are looking to change their insurance coverage more than before after a surge in premiums has strained household budgets, a new industry report shows. While the overall cost of living has risen about 20% since the pandemic began in 2020, auto insurance premiums have jumped nearly 50%.
Europe
The positive news on inflation will help maintain the positive mood that prevailed at the Federal Reserve’s annual meeting in Jackson Hole last week. Chairman Jerome Powell, like the ECB and the Bank of England, made it clear that interest rates are coming down.
House prices in the UK unexpectedly fell in August, according to one of the country’s biggest mortgage lenders, a sign that affordability remains under pressure even after the Bank of England cut borrowing costs.
Asia
Consumer prices excluding fresh food rose 2.4 percent in the capital, up from 2.2 percent growth in July, the Interior Ministry said. After the BOJ’s July 31 rate hike, Governor Kazuo Ueda said he plans to raise the benchmark interest rate again if price trends move in line with the bank’s forecast.
China is asking domestic traders to buy fewer foreign grains as ample supplies and weaker-than-expected demand weigh on prices and threaten longstanding policies to support local growers. China is the world’s largest buyer of barley and sorghum, and continued curbs on imports would hit farmers in top exporting nations such as Australia and the U.S.
China’s mortgage inventory fell to its lowest level in nearly three years, underscoring weak confidence in the real estate sector that is weighing on growth. The data comes as officials consider allowing homeowners to renegotiate the terms of their mortgages with their lenders or refinance with another bank, Bloomberg News reported.
Emerging markets
Missteps and inaction by governments, health agencies and research funders have created the perfect environment for the mpox virus to mutate into a strain that spreads more easily between people. Despite the availability of an effective vaccine — which costs about $100 per shot — and countries like the U.S. stockpiling millions of doses, Congo has yet to receive one.
Zambia’s annual inflation rose to a 32-month high in August as an El Niño-induced drought continued to weigh on food prices. The drought hampered the central bank’s efforts to bring inflation back to its target of 6% to 8% next year and meant key interest rates had to remain high for longer.
World
Hungary kept its key interest rate unchanged for the first time in more than a year, while Guatemala and Kazakhstan also stayed the same. Israel’s central bank kept its key interest rate at 4.5% and said it was unlikely to make any cuts for the rest of the year as the war in Gaza continued. The Dominican Republic cut.
–With assistance from Irina Anghel, Andrew Atkinson, Alfred Cang, Ashleigh Furlong, Jason Gale, John Gittelsohn, Hallie Gu, Janice Kew, Naomi Kresge, John Liu, Yujing Liu, Taonga Mitimingi, Yoshiaki Nohara, Tom Rees, Augusta Saraiva, Zoe Schneeweiss, Mark Schroers, Antony Sguazzin, Alex Tanzi and Alexander Weber.
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