FT News Briefing Are we in a new era of inflation?
Jun 4, 2021
Americans are facing new investment restrictions targeting Chinese defense firms. Job growth in the U.S. appears to be rebounding, signaling potential easing of labor shortages. Experts are debating whether the current rise in prices indicates a fleeting spike or a longer-term inflation issue. The podcast dives into historical inflation responses and the evolving strategies for managing rising prices, including interest rate hikes. Plus, there's buzz about United Airlines aiming to bring back supersonic flights after nearly two decades.
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Importance of May Jobs Report
- The May U.S. jobs report is crucial for understanding the economic recovery after two conflicting previous reports.
- A strong job growth would ease concerns about labor shortages and validate the idea that April's slowdown was temporary.
Inflation Concerns
- Rising prices are driven by economic recovery and unprecedented government stimulus.
- This raises concerns about inflation, a topic not seriously considered for 30 years.
Inflation and Interest Rates
- Central banks aim for stable, low inflation (around 2%) to facilitate economic adjustments.
- Higher inflation, fueled by demand exceeding supply, necessitates interest rate hikes, potentially causing recessions.