Fed Vice Chair Richard Clarida also reinforced New York Fed President John Williams’ dovish comments. Clarida told Fox Business Network that “you don’t need to wait until things get so bad to have a dramatic series of rate cuts.” And, “you don’t want to wait until data turns decisively if you can afford to.”
Clarida reiterated that the US economy is “in a good place”. But “we’ve had mixed data” and “disinflationary pressures, if anything, are more intense than I thought six weeks ago.” He added, “we need to make a decision based on where we think the economy may be heading and, importantly, where the risks to the economy are lined up.”
Japan CPI core slowed to 0.6%, lowest since July 2017
Japan CPI core (ex-fresh food) slowed to 0.6% yoy in June, down from 0.8% yoy and matched expectations. All items CPI was unchanged at 0.7% yoy, while CPI core-core (ex-fresh food and energy) was also unchanged at 0.5% yoy.
CPI core was the lowest reading since July 2017. No turnaround is expected in the near term. Instead, CPI core could be further dragged down by policy related factors, including mobile phone charges and education costs.
The dim inflation outlook highlights the pressure for BoJ to ramp up monetary stimulus. In particular, both Fed and ECB are expected to loosen up policy again later this week.
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