Home Argentina economy Graphical representation of the global economy: the Fed leads a week of rate hikes

Graphical representation of the global economy: the Fed leads a week of rate hikes

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The Federal Reserve led a host of central banks in raising interest rates this week with its strongest move yet to rein in inflation, which has been high for decades.

Policymakers in the United States have raised rates the most since 2000, while those in Australia have seen a bigger-than-expected increase. India surprised markets with its first unanticipated rate change since the depths of the pandemic, and the Bank of England raised interest rates to their highest level since the financial crisis and warned of a possible recession.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:

World

The Fed raised its benchmark interest rate by half a percentage point. Central banks in Australia, Iceland, India, Brazil, the United Kingdom, the Czech Republic, Poland and Chile have also tightened policy to control rapid inflation.

WE

Hiring in the United States grew at a healthy pace in April, but a shrinking workforce could increase pressure on employers to raise wages even further to bring workers back.

Diesel stocks are collapsing on the US East Coast, which could cause more problems for consumers, truckers and farmers ahead of the summer driving season. Stockpiles of distillates – used as transportation fuel as well as to heat homes – fell to 22.4 million barrels last week, the lowest level on record.

The storm of chaos in supply chains has intensified for U.S. manufacturers, with lead times of 100 days – the longest recorded by the Institute for Supply Management since 1987. In addition to transportation delays and shipping, the inability to hire makes things more difficult for producers.

For the first time ever, farmers around the world – all at the same time – are testing the limits of how little chemical fertilizer they can apply without devastating their yields at harvest time. The first forecasts are grim.

Europe

Two years of economic stagnation and almost 600,000 job losses are the price to pay to bring UK inflation under control, Bank of England estimates show.

German factory orders fell more than expected after Russia’s invasion of Ukraine clouded the outlook for the economy by adding to inflationary pressure and disrupting global supply chains.

Asia

China’s strict lockdowns to curb Covid-19 infections are weighing heavily on the economy and upending global supply chains, with President Xi Jinping under pressure to deliver on promises to support growth. The damage wrought by April’s shutdowns in the main financial center of Shanghai, the car manufacturing hub of Changchun and elsewhere was laid bare by the first official data of the month.

Inflation in South Korea accelerated in April at the fastest pace since 2008, prompting the central bank to issue a statement amid mounting pressure for it to raise interest rates further during the policy meeting this month.

Emerging Markets

Turkey and Argentina are recording the highest inflation rates in the Group of 20 as price pressures intensify in the global economy.

Saudi Arabia’s economy grew at the fastest pace in more than a decade in the first quarter, largely on the back of soaring oil prices and increased production.

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