Were Prof. Schlesinger alive and writing today he could not have put it better. The basic assumption of mainstream financial thinking is that inflation is a temporary phenomenon and will be cured by a swift course of higher rates prescribed by the Federal Reserve. Yet, there are plenty of grounds for thinking that, just as in 1974, the professor is right, and the inflationary pressures on today's capitalism will last.
China Inflation Picks Up as Covid-19 Restrictions Fall
SINGAPORE-Inflation in China picked up in December and is expected to accelerate further in the months ahead as the economy revs up following Beijing's abrupt dismantling of its zero-tolerance measures to contain Covid-19.
Consumer prices rose 1.8% in December compared with a year earlier, faster than the 1.6% annual rate recorded in November, China's national statistics bureau said Thursday.
Japan Central Bank Upgrades View on Four of Nine Local Economies
The Bank of Japan on Thursday raised its economic assessment for four of the nation's nine regions as recovery from the pandemic continued.
In its quarterly regional economic report, the bank said Japan's local economies were affected by rises in commodity prices.
The Stock Market Needs to Stop Worrying About the Fed and Think About This Instead
The stock market is fixated on interest rates and inflation, hoping a decline in the latter will bring a fall in the former. The problem is that this would mean lower profits than currently expected.
Though it has been rallying this week, the S&P 500 remains about 18% below its January 2022 record high. The main factor is that high inflation has prompted the Federal Reserve to lift interest rates in order to reduce demand for goods and services and keep prices from rising even more. An end to rate increases would allow investors to look ahead to the end of the economic damage they bring.
Natural-Gas Prices Are Topsy-Turvy. Expect More Swings This Winter.
Natural gas has seen a shaky start to 2023, with U.S. prices falling to their lowest level in more than a year just halfway through the winter season, which is typically a period of high demand for the heating fuel.
There is "nothing unusual in U.S. gas demand versus what we have seen in the past few years," says Saulius Adomaitis, global oil and gas leader at professional services network EY, pointing out that U.S. prices are "very much affected" by what's happening outside the country.
China International Flights to Recover Slowly After Covid Reopening
International flights are likely to rebound slowly after China lifted its Covid-19 border restrictions, with industry experts suggesting it would take months for a strong recovery and even longer to return to prepandemic levels.
Governments have tightened entry requirements for passengers coming from China due to a large Covid-19 outbreak there, and Beijing has responded with travel restrictions of its own on some of those countries. Aviation regulators are still negotiating bilaterally with their Chinese counterparts on increasing flights. Plane ticket prices remain high, while airlines must also reroute their jets to fly again to China.
U.S. Flight Disruptions Mount After FAA Grounding Order Ends
An outage with a federal pilot-alert system cascaded into a nationwide logjam at U.S. airports Wednesday, snarling thousands of flights and temporarily stranding travelers across the country.
The breakdown of the Federal Aviation Administration's Notice to Air Missions system, which provides safety information to pilots, led the agency to issue a nationwide "ground stop" that halted domestic departures for nearly two hours, before flights were permitted to resume shortly after 9 a.m. ET.
Biden Aides Discover Additional Classified Documents at Second Location
WASHINGTON-President Biden's aides have found additional classified documents in a second location beyond those discovered in November at a Washington office Mr. Biden used after his vice presidency, a person familiar with the issue said Wednesday.
It couldn't immediately be determined where or when the additional documents were found. The White House didn't respond to requests for comment about the second batch of records, which was reported earlier by NBC News. A Justice Department spokesman declined to comment.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
01-12-23 0603ET
