Inflation’s Over The Hill

Inflation’s Over The Hill

over 1 year ago2 mins

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Global inflation might just have peaked, according to reports out over the weekend.

What does this mean?

The world’s had too many unwanted records lately. After global inflation hit a new high of 12.1% back in October, the only new records we want now are the ones emerging from this year’s World Cup. Looks like there’s hope things are turning around, too: right on cue, Messi’s started setting records in Qatar, and there are signs inflation’s about to run out of steam. See, a number of closely-watched global metrics – like commodity prices, shipping rates, and inflation expectations – have begun to ease from their record highs. That’s supported by data from Capital Economics, showing that inflation’s peaked across emerging markets – while price pressures in developing economies are cooling down too. No wonder, then, some economists are predicting an end to global inflation’s record-setting streak.

Inflation metrics (PMIs)

Why should I care?

The bigger picture: Hold your horses.

Central banks have been doing their darndest to get inflation under control these past few months, but this news won’t have them cracking out the champagne just yet. After all, there’s still a long way to go before we hit the 2% target rate set by most advanced economies. And let’s not forget that energy costs are still a sore spot: the war in Ukraine has got supply on a knife-edge, and Chinese demand could send prices skyward if the country’s economy comes back roaring. So sure, things might not be getting any worse right now – but high inflation isn’t going to disappear overnight.

High inflation

Zooming out: Christmas came early.

Lingering high prices didn’t seem to daunt US shoppers over the holiday weekend, with data from Adobe Analytics showing that they set an online-spending record of over $9 billion on Black Friday. And on reflection, it makes sense: that could've been shoppers’ last chance to buy gifts at a discount before Christmas rolls around.

US holiday spending
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