LlewellynConsulting - Key Developments & Chart of the week - US inflation.

▪ That said, it is just possible that that the peak is in sight: the indices of prices paid and received by manufacturers in the Philadelphia Fed’s district2 dropped sharply in December.3 US economic activity. [...] UK hikes, as do many others;7 and the Fed, ECB and BoJ accelerate tapering ▪ The Bank of England became the first major OECD economy to raise rates, with a 15bp pre- emptive rate hike in its Bank Rate to 0.25%, citing the strength of inflation and of the economy.8 The Fed9 and the ECB10▪ will end asset purchases by March; the BoJ will taper debt purchases.11 Bottom line: Our World View remains bas. [...] ▪ The ‘outlier’ in the central banking world, Turkey, cut its policy interest rate by 100bp to 14%, bringing the cumulative rate reduction since September to 500bp, despite inflation running at 21.3% over the 12 months to November. [...] The Turkish lira fell another 8% after the announcement, bringing the cumulative decline against the US$ since the first rate cut to 45%. [...] See: Amendment to "Principal Terms and Conditions of the Special Funds-Supplying Operations to Facilitate Financing in Response to the Novel Coronavirus (COVID-19)" (boj.or.jp) 12 The data in this chart are from the Bank of England’s November inflation report, and the latest data were up to August.