For decades, Americans have enjoyed falling prices for cars, electronics and furniture. Until the Covid-19 pandemic, that is. For the past year, prices for durable goods have been rising—and not just by a little. Whether those prices come back down is a key part of the puzzle facing the Federal Reserve as it plots how to handle an unexpectedly strong burst of inflation.
The U.S. response to climate change and decarbonization is ramping up, and putting a focus on the country’s electricity mix. As pressure has increased for near-term and immediate action after the UN’s latest IPCC report on climate change, major economies are starting to make bolder pledges. For the United States, that includes a carbon pollution-free utilities sector by 2035.
The White House, hoping to make good on Biden’s campaign promises ahead of the 2022 midterm elections, has billed the plan as a generational investment. The Senate overwhelmingly approved the $1 trillion infrastructure bill earlier this month in an effort to rebuild the nation’s crumbling roads and bridges and fund new climate resilience and broadband initiatives. The House aims to pass the bill by October.
Although no economy is the same and there are relevant differences between the Japanese and the US or European macro setup, we can learn quite a few things by studying what happened in a jurisdiction that experimented with QE and ‘‘QE + fiscal’’ already 20-30 years ago.
The rise of Robinhood and the frenzy surrounding GameStop Corp. earlier this year signaled the growing importance of retail investors. The stock market had been largely dominated by institutional investors since the crash of 2008, but Covid-19 and the Federal Reserve’s accommodative monetary policy scrambled the playing field.
The entire auto industry has been hobbled for months by the worldwide shortage of semiconductor chips, which has prevented manufacturers from producing enough vehicles to meet the demand from Americans eager to spend their pandemic savings and stimulus checks. As a result, many dealerships are practically barren of inventory, and new rides are fetching record prices.
Wall Street investors have bought into the Federal Reserve’s assurances that higher inflation won’t last, but a looming trend will test their composure over the coming months: soaring home and rental costs.
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