Have Far East central banks called a US dollar top?

USD sales by monetary authorities in Japan, China and other Far East economies have probably topped $100 billion since April, exceeding intervention around the October 2022 dollar peak. Market estimates are that JPY purchases / USD sales by the Bank of Japan on behalf of the Ministry of Finance on 29 April and 1 May totalled about ¥9 trillion / $ 57 billion. Official numbers covering the period from 26 April will be released next week. Continue reading

Is US money growth stalling?

A post in February argued that US Treasury plans to reduce reliance on bills to fund the deficit implied weaker monetary expansion from Q2, with possible negative implications for markets and economic prospects. This scenario remains on track. Continue reading

US core inflation: staying optimistic

The Fed’s preferred core price measure – the PCE price index excluding food and energy – rose by an average 0.36% per month, equivalent to 4.4% annualised, over January-March. The FOMC median projection in March was for annual core inflation to fall to 2.6% in Q4 2024. This would require the monthly index rise to step down to an average 0.17% over the remainder of the year. Continue reading