The US core PCE (stripping out food and energy) hit 3.4%/yr in May. That's the HIGHEST since 2023.
THE INFLATION GENIE IS NOT GOING TO BE PUT BACK IN THE BOTTLE ANYTIME SOON.
The current monetary policy stance of the Bank of Japan reflects a structural tension between fiscal dominance and the legacy of a prolonged low-rate environment #BOJ#Japan#Yen
The current monetary policy stance of the Bank of Japan reflects a structural tension between fiscal dominance and the legacy of a prolonged low-rate environment.
With gross public debt exceeding 240% of GDP, any aggressive policy rate hikes risk destabilizing the JGB market and sharply increasing debt servicing costs.
Persistent US Treasury yields combined with a resilient DXY keep the yield differential wide, maintaining structural depreciation pressure on the Yen.
In this environment, verbal interventions and spot FX operations remain temporary volatility-suppression tools rather than trend-reversing measures.
Technically, a decisive upside breakout from the current supply zone around 160-163 would leave little resistance, opening the path toward 170-180 and potentially higher in a loss-of-control scenario.
Either aggressive preemptive action or an outright policy failure carries the risk of triggering a violent unwind of yen-funded carry trades, with significant implications for global liquidity.
The current monetary policy stance of the Bank of Japan reflects a structural tension between fiscal dominance and the legacy of a prolonged low-rate environment.
With gross public debt exceeding 240% of GDP, any aggressive policy rate hikes risk destabilizing the JGB market and sharply increasing debt servicing costs.
Persistent US Treasury yields combined with a resilient DXY keep the yield differential wide, maintaining structural depreciation pressure on the Yen.
In this environment, verbal interventions and spot FX operations remain temporary volatility-suppression tools rather than trend-reversing measures.
Technically, a decisive upside breakout from the current supply zone around 160-163 would leave little resistance, opening the path toward 170-180 and potentially higher in a loss-of-control scenario.
Either aggressive preemptive action or an outright policy failure carries the risk of triggering a violent unwind of yen-funded carry trades, with significant implications for global liquidity.
@atollo Sovereign Debt Crisis: Spiraling debt levels across Western economies continue to present long-term structural threats, pointing toward ultimate wealth preservation via hard assets. $GLD
@atollo The World Gold Council annual survey reports that 89% of global reserve managers expect central bank gold holdings to keep expanding over the next 12 months as countries actively diversify away from the U.S. dollar.