Uysal repeated that policy is consistent with targeted "gradual" disinflation.
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The higher saving rates, Raymond James believes, has had disinflation impact, driving the relatively slow growth and low inflation in this recovery, causing the incentives for excess supply, and disinflation biases in the global economy.
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The central bank says disinflation began in June and should continue.
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And one of the issues I've not heard enough discussion is disinflation.
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It's a great way to play the disinflation that I see happening.
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Debt and disinflation would lead to rising bond prices (and falling yields).
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Get ready for disinflation – headline slowing notably and core remaining below target.
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The winds of disinflation have been blowing through American retail for decades.
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For nearly two decades economists have talked of an era of "global disinflation".
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So I am not sure these technological disruptions will continue to bring disinflation.
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Financial deflation and technological disinflation remain the larger factors in a weak global economy.
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" "We cannot rule out that there could be disinflation in the summer or in September.
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Moody's said it expected India's disinflation trend to end soon due to rising food prices.
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"For real-money investors buying the disinflation story, this is a good thing," he said.
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The double-talking Greenspan actually bragged about his prowess in generating something he called "disinflation".
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Yudaeva said the balance of short-term risks to the economy had shifted towards disinflation.
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But disinflation was widespread, thanks to a slower-than-expected economic recovery and double-digit unemployment.
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If this cycle had produced an 80s-level disinflation, we'd be well into deflation by now.
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It said the economic recovery is seen being sustained by the help of the disinflation process.
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"Developments in domestic demand conditions and the tight monetary policy support disinflation," the central bank said.
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Despite indications of disinflation in the economy, Fed officials appear convinced that inflation is only "temporarily" subdued.
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EUROPE The ECB introduced negative rates in 2014 in the face of chronic disinflation and low growth.
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Or is it really just secular disinflation globally that is the primary thing that we're talking about here?
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There are, however, two potential novelties to watch out for when trying to guess whether disinflation will persist.
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Structural forces for disinflation, such as technology, globalization, aging demographics and excess leverage, have overwhelmed cyclical inflation pressures.
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After four decades of disinflation in developed economies, that sort of destabilising inflationary momentum is hard to imagine.
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Fitch believes that the disinflation process will be more moderate due to challenges such as backward-looking salary adjustments.
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"With eyes toward consolidating disinflation, the monetary authority will continue proceeding with caution," the bank said in a statement.
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The recessions and disinflation of the early 1980s proved a watershed both for macroeconomics and the practice of central banking.
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Possibly, that the real impact of a trade deal is negligible and that disinflation and low global growth risks remain.
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All Copom members said more austere fiscal programs would be key to disinflation and monetary policy decisions, the minutes showed.
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"The U.S. is no longer importing disinflation," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania.
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Citi cut its forecasts for global economic growth for 2016 to 2.7 percent from 2.8 percent, citing pressures from disinflation.
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Policy will hinge on "indicators of the underlying inflation trend to ensure the continuation of the disinflation process," it added.
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After a long downturn and disinflation central banks would have to push to find the limits of the economy's capacity.
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"If (further devaluation) is not avoided, it would have the potential to delay the disinflation process," the monetary authority wrote.
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Yaron downplayed much of the disinflation, saying it was mainly due to volatile items like energy and fresh produce prices.
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No one really knows why, but after almost four decades of global disinflation, prices and wages seem to be broadly stable.
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In June, the bank took another step toward a rate cut when in a statement it shifted the focus to disinflation.
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Our expectation is that the central bank will start to ease interest rates this year, provided there are signs of disinflation.
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In fact, the U.S. is joining the rest of the world in a persistent pattern of alternating deflation and disinflation ("lowflation").
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In Greenspan's time, technological disinflation, and financial deflation, pushed yields lower without implying a slowdown in growth, at least for some time.
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"Bond markets are telling you that disinflation is coming," said Tim Graf, chief macro strategist at State Street Global Advisors in London.
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He said that while inflation was now above target, there would eventually be rapid disinflation in the wake of the epidemic's impact.
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However the bank said it expects inflation to be closer to 11.2% by end-2019, with "balanced" risks to disinflation in 123.
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"Rural areas' food inflation rate tends to overshoot and undershoot other areas' during times of rampant inflation and disinflation respectively," Van Deventer said.
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The plunge in oil prices may be welcome for importing nations, but it is also complicating the lives of central bankers battling disinflation.
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In fact, says Mr Sturzenegger, it sought a gentler pace of disinflation in order to reduce the cost of those backwardly indexed pensions.
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Those who champion inflation-targeting reject the idea that emerging markets' disinflation is a result of global factors rather than better economic policy.
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Maintaining a sustained disinflation process is vital to lowering Turkey's risk profile, bringing down longer-term rates and strengthening the economy, it added.
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The action signals the bank's confidence that disinflation will continue as the government tries to pull Latin America's No. 3 economy out of recession.
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The previous reading was on target, but the March level was revised lower, indicating yet more ground lost in the battle to thwart disinflation.
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U.S. crude had fallen 17 percent in just seven sessions, a gift to consumers across the globe but also a strong force for disinflation.
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"The bond market — more than $15 trillion of negative yielding bonds — is telling us a very high risk of disinflation, not deflation," he said.
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Real interest rates will likely move higher because of disinflation or deflation from lower oil and commodity prices, economic weakness and more credit problems.
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"Keeping the disinflation process on track with the targeted path requires the continuation of a cautious monetary stance," the bank said in the minutes.
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And emerging markets still provide the main exceptions to global disinflation, including Argentina and Turkey, where inflation is running at 54% and 15% respectively.
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"We would like for a quicker pace of (disinflation) in 2017 in order to reach the 4.5 percent center of the target (range)," he said.
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"Inflation and fear of Fed remains No.1 reason for Q4 volatility/sell-off; in contrast more disinflation data and it's Icarus Unleashed," strategists wrote.
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Hence, the yield curve flattens and, ultimately, "inverts" to the point where long rates fall below short rates in anticipation of a recession and disinflation.
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The improving activity picture has been accompanied by rapid disinflation in the aftermath of two years of recession and a recent strengthening in exchange rates.
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"Developments in domestic demand conditions and the tight monetary policy support disinflation," the central bank said in a statement after its monetary policy committee (MPC) meeting.
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All of which might spur disinflation expectations, which could hold back investments and spending, a negative for the economy that the RBA will want to avoid.
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But if you concede that unemployment had a lot to do with Spanish inflation and disinflation, you've already conceded the basic logic of the Phillips curve.
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He also said he has favored keeping Brazil's inflation targeting regime tied to calendar years because Brazil is in the middle of a process of disinflation.
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"The monetary authority will continue proceeding cautiously, looking for the disinflation process observed in recent months to continue over time," the central bank said in a statement.
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"We strongly feel that the peaks in both overall and core disinflation pressures are behind us," said John Ryding, chief economist at RDQ Economics in New York.
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"Maintaining a sustained disinflation process is the key for achieving lower sovereign risk, lower long-term interest rates, and stronger economic recovery," it said in a statement.
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The disinflation process is likely to be gradual and improving the effectiveness of monetary policy is dependent upon reducing programme lending and financial dollarisation (71% of deposits).
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"The decision was made with the aim of guaranteeing the disinflation process and the central bank is ready to act again if necessary," the bank's statement said.
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The central bank then listed conditions for a rate cut, including the persistence of food price shocks, uncertainty around fiscal adjustment measures and a pick-up in disinflation.
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Well, it would be curious indeed for the central bank to pump up inflation in other parts of the economy to somehow offset "good disinflation" in other parts.
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And disinflation adds to the potential danger, since, as Italy's dire experience has shown, bad loans tend to get worse when nominal GDP growth slows to a crawl.
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Despite concerns about disinflation, Dudley said he expects the U.S. economy to grow slightly above 2 percent in 2016 with a bit more tightening in the labor market.
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IF YOU WERE CONVINCED THAT THE SECULAR DISINFLATION WAS THE NEW NORMAL AND IT HAS BEEN FOR AWHILE, WOULD YOU RECALIBRATE HOW NORMALIZED RATES REALLY NEED TO BE?
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"Naturally, if you seek a lower rate of disinflation than planned originally, the path of monetary policy will be less contractive than the one before," the statement said.
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The negative yields in Germany are harder to swallow, even if the European Central Bank proves a less willing or able disinflation-fighter than the U.S. Federal Reserve.
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"The tight policy stance and stability on the foreign exchange market alongside easing inflation expectations, and generally improving fundamentals should provide additional momentum to the disinflation process," he said.
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The monetary policy committee "will continue monitoring movements in inflation to ascertain if recent soft readings are transient or if a more durable disinflation is underway," the RBI said.
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"In a sense, what we have seen over the last eight years is an environment of disinflation in the real economy but significant inflation in financial assets," he said.
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"Both the Central Bank of Argentina and the consensus of market analysts expect the process of disinflation to continue in coming months," the central bank said in a statement.
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For the best part of a year the Verizon disinflation became crucial to central bankers' own communications, as they promised financial markets that the effect would soon wear off.
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Bank of Israel officials have held firm in their view that intervening in the foreign exchange market is the best way to prevent disinflation stemming from a strong shekel.
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DISINFLATION EVERYWHERE Bond yields idled as a boost from the trade deal failed to offset pressure from low U.S. producer price inflation data, which highlighted persistently low inflationary pressure.
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DISINFLATION EVERYWHERE Bond yields dropped as a boost from the trade deal failed to offset pressure from low U.S. producer price inflation data, which highlighted persistently low inflationary pressure.
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In the minutes of last week's monetary policy meeting, the bank said a cautious monetary stance is required to keep the disinflation process in line with the targeted path.
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His pet themes of disinflation, the dangers of debt, the vices of central bankers and the perils of complacency are now also found in the PowerPoint packs of rival strategists.
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Central Bank Governor Yakiv Smoliy said in April the bank was ready to continue monetary policy softening provided there was a strong disinflation trend and timely disbursements of IMF funds.
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The bank then said a rate cut would depend on factors that included the persistence of food price shocks, uncertainty around fiscal adjustment measures and a pick up in disinflation.
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He said the most recent forecast showed the rate of disinflation slowing marginally on possible second-round effects of recent increases in petroleum prices, exchange rate depreciation and tax increases.
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This chart illustrates the dilemma the central bank faces today with its dual mandate: While the unemployment rate is falling, prices are not stable and are even hinting at disinflation.
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"But it's possible they could do 2117.99 bps given how oil is trading," he said, adding that either outcome was fine for the rouble due to the pace of disinflation.
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"At this point, the current monetary policy stance is considered to be consistent with the projected disinflation path," the bank said in its statement after its monetary policy committee meeting.
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It will be important to watch what the effect of this demonetization and subsequent demonetization is on commodity prices and whether the disinflation seen so far continues and "for how long".
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"High frequency indicators monitored by the central bank show a mixed performance which does not at the moment alter the monetary authority's disinflation forecast," the central bank said in a statement.
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It has said its current stance was in line with the projected disinflation path, and that it had used significant amount of leeway to loosen policy to boost recovery from recession.
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In the minutes of its last rate-setting meeting, the bank said all of its members were satisfied with the progress of disinflation, but remained cautious about high inflation expectations for 2017.
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That was well short of the RBA's long-term target band of 2 to 3 percent, suggesting the economy needed to grow faster if disinflation was not to become the new norm.
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"Keeping the disinflation process in track with the targeted path requires the continuation of a cautious monetary stance," the central bank said in its first action under Murat Uysal, a former deputy.
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The capacity of monetary policy to support growth remains limited in the region, as central banks seek to consolidate the current disinflation path and, in some countries, support the economy's external rebalancing.
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"The committee assesses that maintaining a sustained disinflation process is the key for achieving lower sovereign risk, lower long-term interest rates, and stronger economic recovery," the bank said in its statement.
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BUENOS AIRES, Aug 2 (Reuters) - Argentina's central bank lowered its 35-day reference rate by 25 basis points on Tuesday, and said that it would move to "cautiously" consolidate disinflation in the future.
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ISTANBUL, Jan 16 (Reuters) - Turkey's central bank said on Thursday that the current monetary policy stance remains consistent with the projected disinflation path as it lowered its policy rate by 75 basis points.
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"At this point, the current monetary policy stance, to a large part, is considered to be consistent with the projected disinflation path," the bank said in its statement after its monetary policy committee meeting.
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"The disinflation from food and fuel are probably going to start fading, we don't anticipate inflation to drag from these factors," said Vishnu Varathan, head of economics and strategy for Asia at Mizuho Bank.
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Uysal told Anadolu that the bank had sufficient room for a cut in interest rates as he expected disinflation to continue in 2019 on the back of declining cost pressures and weaker domestic demand.
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So I look at things like Spain's disinflation in the face of massive unemployment: I'd say that the preponderance of evidence still supports the notion that high unemployment depresses inflation, low unemployment fosters inflation.
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ISTANBUL (Reuters) - Turkey's central bank said on Thursday that the current monetary policy stance is considered to be consistent with the projected disinflation path, as it cut its policy rate by 200 basis points.
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ISTANBUL, June 12 (Reuters) - Turkey's central bank will keep its monetary policy stance tight to "reinforce the disinflation process," it said on Wednesday as it kept its benchmark interest rate on hold at 24%.
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However, the bank said in its post-decision statement that it could opt for steeper cuts in the future if the pace of disinflation accelerates and Congress presses ahead with the approval of austerity measures.
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In its post-meeting statement, the bank said it had considered a 50 basis points cut but decided to frontload the monetary easing as widespread disinflation and a halting recovery called for more aggressive action.
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In the minutes of last week's monetary committee meeting, the central bank said the extent of monetary tightness will be determined by considering the indicators of the underlying inflation trend to ensure that disinflation continues.
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"The possible end of the benign interregnum for emerging economies may hinder the process of disinflation," said the bank, which pointed to that as one of the three main risks to meeting its inflation target.
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"We foresee the current strong disinflation trajectory lasting until November and to register its lowest reading in October," said Mona Bedir, senior economist at Egyptian investment bank Prime Holding, who predicted a 100-bps cut.
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ISTANBUL, Dec 12 (Reuters) - Turkey's central bank said on Thursday that the current monetary policy stance is considered to be consistent with the projected disinflation path, as it cut its policy rate by 200 basis points.
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In effect, they mean that commercial banks are charged to store cash with the central bank and are intended to incentive greater lending by banks to businesses and individuals at times of disinflation, deflation of low growth.
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Central bank director Altamir Lopes, a member of the bank's eight-member board, said past monetary tightening helped produce a "significant" drop in inflation and said policymakers should persevere in the monetary adjustment for disinflation to continue.
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The Turkish central bank said on Thursday policymakers must keep a lid on financial volatility and deliver predictable fiscal policies to keep the economic recovery on track, adding that its own policy will depend on further disinflation.
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The dominant tech stocks such as the FANG foursome are, in a way, a leveraged play on disinflation, because not only can they grow fast organically but their businesses themselves – digital networks – are drivers of consumer deflation.
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The premise of opportunistic disinflation was that Paul Volcker's success in reducing inflation from the double-digit levels of the 1970s to the 4 percent or so rate that prevailed during the Reagan administration wasn't good enough.
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It is possible, some suppose, that the weak growth and sustained disinflation of the past half-decade has blinded markets and policy-makers to the potential for a sharp swing in the other direction, toward uncomfortably high inflation.
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"According to the (central bank policy committee) Copom, short-term inflation has also been more favorable than anticipated, with signs of broader disinflation," UBS economists Guilherme Loureiro, Thiago Carlos and Rafael de la Fuente wrote in a note.
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ISTANBUL, June 19 (Reuters) - A slowdown in Turkish demand and a tight monetary stance supports disinflation, Turkey's central bank said on Wednesday in the minutes of last week's policy meeting at which it left interest rates unchanged at 24%.
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"Given the bank's increasing confidence about ongoing disinflation, it utilized the room for policy maneuver and over-delivered again while maintaining its previous guidance ... that signals a more cautious policy stance," wrote Muhammet Mercan, chief economist, Turkey at ING.
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"Given the bank's increasing confidence about ongoing disinflation, it utilised the room for policy manoeuvre and over-delivered again while maintaining its previous guidance ... that signals a more cautious policy stance," wrote Muhammet Mercan, chief economist, Turkey at ING.
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ISTANBUL, Sept 12 (Reuters) - Turkey's central bank said on Thursday that keeping the disinflation process on track with the targeted path requires the continuation of a cautious monetary stance, as it cut its policy rate by 325 basis points.
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"MPC decided that keeping key policy rates unchanged remains consistent with achieving the inflation target of 9 percent (±3 percentage points) in 2020 Q4 and supporting the disinflation path over the medium-term," the bank said in a statement.
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"That said, non-food inflation also shows signs of upward pressure, as the disinflation from energy fades and as the housing market heats up," the economists added, forecasting CPI would rise by 2.1 percent, in line with the consensus estimates.
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ISTANBUL, June 12 (Reuters) - Turkey's central bank left its benchmark interest rate unchanged on Wednesday as expected and said it will maintain a tight monetary policy stance in order to contain risks to pricing behaviour and reinforce the disinflation process.
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Slower global growth and the drop in inflation across advanced and emerging market economies had revived the risk of disinflation, the IMF said, warning that missteps in macroeconomic policies could have a severely debilitating effect on sentiment, growth and job creation.
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Disinflation was seen as the main argument for the long-awaited rate cut, after the head of the central bank's monetary policy department said earlier this month he would suggest to the board of directors that they consider lowering the rate.
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From the Fed's perspective, amid the more hawkish lean as of late, the committee is no doubt focused on the continued gains in topline employment and that alone should be enough to justify further action despite clear signs of disinflation.
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"The central bank will continue to maintain a clear anti-inflationary bias to ensure that the disinflation process continues toward its target for this year of a monthly inflation of 1.5 percent or less in the last quarter," the statement said.
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According to this hypothesis, an economy running above potential output will experience not just inflation but accelerating inflation, while an economy with persistent slack will experience ongoing disinflation, with the inflation rate falling continuously and eventually turning into accelerating deflation.
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"Continued disinflation should allow CBE to continue its monetary easing it started last month," said Mohamed Abu Basha, an economist at Egyptian investment bank EFG Hermes, who predicted a 50-bps cut because of volatile markets and rising oil prices.
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In the minutes of last week's monetary policy committee meeting, the central bank also said that as the contribution of net exports to economic growth declines, economic recovery is expected to be sustained with the help of the disinflation process.
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Even a short-term swing in an exchange rate can be the difference between profit and loss for small or medium-sized firms in an era of disinflation and sluggish demand, with many burdened by debts from the 2008-09 financial crisis.
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No changes to text.) MOSCOW, Nov 5 (Reuters) - Russia's low loan supply, which in September accounted for 3.5% of gross domestic product (GDP) in the past year, has helped support the disinflation trend in the economy, Russia's economy ministry said on Tuesday.
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Murat Uysal, who was appointed governor after President Tayyip Erdogan ousted his predecessor, said the bank had "room for manoeuvre" in its monetary policy as he expected disinflation to continue in 2019 on the back of declining cost pressure and weaker domestic demand.
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"The bottom line is that the 'disinflation boom' will probably end as a combination of the US balance sheet beginning to be shrink combines with a slowdown in bond purchases by the [Bank of Japan] and [European Central Bank] through 2018," Darby added.
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"It said the last time that (policy) was in line (with the targeted disinflation path)... but we've seen up to now that this does not prevent rate cuts," he said of the bank's tendency last year to cut by more than expected.
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We've had a drastic disinflation in the second half of last year, and I think the new Finance Minister is going to be much more keen on the fiscal issues, so Argentina has a large fiscal deficit, and we have to have fiscal sustainability.
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"The committee noted that the current inflation forecast provides scope for monetary policy to realign interest rates, translate the disinflation gains achieved so far to the market, and reinforce fiscal consolidation process by easing the burden of interest payments on the budget," Addison said.
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"At this point, while the risk of renewed disinflation has clearly receded, there is little indication of an imminent acceleration in underlying price pressures," the MAS said, adding that it will monitor incoming economic data closely and assess their impact on the growth and inflation outlook.
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"The higher savings rate, we believe, has had disinflationary impact, driving the relatively slow growth and low inflation in this recovery ... causing the incentives for excess supply, and disinflation/deflation biases in the global economy," Raymond James analyst Tavis McCourt wrote in a note to clients Thursday.
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However, this leads China into a "catch 22" with rising leveraging eroding private sector confidence and leading to further decline in velocity of money (it is already below Japan's) and hence requiring even more debt, ad infinitum, leading to strong disinflation, decline in ROEs whilst storing debt recognition problems.
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"Since we have committed to move closer to 4 percent inflation because of the legislative and notified mandate of the government, we needed to look beyond the headline number to see where the kind of disinflation that is needed to take us towards 7.43 (percent) would come from," he said.
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ISTANBUL, July 25 (Reuters) - Turkey's central bank said on Thursday that maintaining a cautious monetary stance is required to support disinflation as it cut its key interest rate by a more-than-expected 425 basis points to 19.75%, its first policy change since last year's currency crisis tipped the economy into recession.
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"While our base case is that the US and other G7 equity markets are benefiting from a 'Disinflation Boom' ... similar to the late 1990s, ultimately monetary policy will tightenenough to cause a recession, " he said, adding the Fed is facing the same "conundrum" it did when Alan Greenspan was the Fed Chairman.
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"Estimates and high-frequency indicators from state and private sources monitored by the central bank confirm that April inflation was at a higher level than that sought for this time of the year, while suggesting that in May the economy will resume the process of disinflation," the bank said in its twice-monthly policy statement.
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"After a year of lethargic disinflation, the drop in headline inflation to 14.3 percent in February 2018 ignites hope that inflation is still on a steady course towards the target 9.0 percent ceiling and that conditions could continue improving to favour unwinding the present hawkish monetary stance," StratLink wrote in a note to clients.
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Numbers that don't show up in the Labor Department's closely watched monthly nonfarm payrolls report undercut the strength that the headline number suggests: Those numbers, compiled by economist David Rosenberg at wealth management firm Gluskin Sheff and experts, point not to a sector nearing full employment but rather one that remains vulnerable to the disinflation trend that is tugging on the broader economy.
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More broadly, with waning momentum on the part of the consumer facing lackluster wage growth over much of the past decade, moderating business investment, early signs of weakness in the housing market and a rising threat of disinflation imported from deteriorating global market conditions, the prospect from slower domestic growth appears to be mounting with the risk of recession rapidly rising over the coming 12-18 months.
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"If you don't like the idea that Easy Money is a panacea for asset markets and think the Bank of Korea rate cut reflects the woes of an economy with excess savings, importing disinflation from both Japan and China and heading for economic stagnation, this might be a good time to find a rock to hide under for a while," Kit Juckes, strategist at Societe Generale, said in a note on Thursday.
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Goldman Sachs economics research, June 2017The rocky road to reflation, Goldman Sachs economics research, May 2017Productivity paradox v2.0: the price of free goods, Goldman Sachs economics research, July 2019The Amazon effect in perspective, Goldman Sachs economics research, September 2017Economic research note: global disinflation shock to linger, though not like 2015-903 JPMorgan Chase, July 2019Some simple tests of the globalization and inflation hypothesis, by Jane Ihrig, Steven B. Kamin, Deborah Lindner, and Jaime Marquez, Federal Reserve International Finance Discussion Papers, April 2007The dog that didn't bark: has inflation been muzzled it was it just sleeping?
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