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Printed: 20 April 2024 4:35 PM

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15 Mar 2024 - Hedge Clippings | 15 March 2024

By: FundMonitors.com

    

Hedge Clippings | 15 March 2024

You can take your pick when it comes to forecasts for inflation in both the US and Australia. The general consensus being that while declining from the levels of 12 months ago, the rate of decline is slowing. The same goes for Europe - according to forecasts from the Federal Planning Bureau in Belgium, (surely the World's centre of bureaucracy and bureaucrats) the average CPI in 2024 should be 3.0%, dropping to 1.8% in 2025, compared to 4.06% in 2023, and 9.59% in 2022. While European inflation has been more severe than either the US or Australia, we live in a global world and the overall trend is likely to be much the same.

Although the latest US figures, at first glance, looked bad, with February's core inflation only declining slightly, the real issue was that the consensus expectations were they'd be better than 3.8% and there's still a long way to go to get to the Fed's target of 2.0%, so don't expect a rate cut next week on Wednesday following their two day meeting.

Locally we'll have to wait until towards the end of the week after that before the ABS releases February's Australian CPI numbers (Wednesday 27th) followed by December Qtr National Accounts, monthly Retail Trade, and Labour Force numbers the following day, just before the Easter break. As a result, without the benefit of that information, the outcome of next week's RBA's board meeting is likely to be up in the air - although we don't expect an early easing here either.

Although inflation has fallen considerably to January's 3.4%, the mainstream media (at least the ABC if they can be called "mainstream") still like to refer to it as if it is closer to double digits, but that's probably the news cycle. Inflation makes a good news grab - although obviously not as good as a poorly photo-shopped happy (?) family snap from Kensington Palace. One wonders, given all the serious issues in the world, what is so important about said photo - while one also wonders what must be so secret?


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