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1.Market Observations, 8.Was Sticky

26 July 2017 (AFR) – How the rise of superstar companies is killing inflation

(26 July 2017, AFR, p29, by Steve Johnson, FTimes)

‘The mystifying absence of inflation across most of the world, despite decent economic growth and ultra-loose monetary policy, is one of the big issues investors, not to mention central bankers and politicians, are grappling with. Further interest rate rises in the US surely depend on an economy with near-full employment recording, at some point, a meaningful rise in inflation. Likewise in Japan and Germany, the Phillips curve – which describes the long-observed tendency for inflation to rise as labour markets tighten – appears to have gone absent without leave.’

Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

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