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U.S. Post-WWII Debt Reduction Not Solely Due to Economic Growth, Study Finds

U.S. Post-WWII Debt Reduction Not Solely Due to Economic Growth, Study Finds

A new paper in the American Economic Journal: Macroeconomics by Julien Acalin and Laurence Ball re-examines the significant reduction in the U.S. federal public debt-to-GDP ratio from over 100% in 1946 to 23% by 1974. Contrary to a common belief that economic growth alone was the primary driver, the authors contend that historical contingencies and specific distortions played a crucial role. They identify three key factors: government primary surpluses, which involved taxes exceeding government spending to pay off war debt; the Federal Reserve's interest rate peg from 1942 to 1951, which capped government bond yields at low levels; and surprise inflation, which eroded the real value of nominal government debt. Acalin stated that the distortion effect, particularly from interest rates, was massive, accounting for approximately 40 percentage points of the debt-to-GDP ratio reduction. The study concludes that without these surpluses and distortions, the debt-to-GDP ratio would have only fallen to 74% by 1974,...
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US consumer prices accelerate in August, push Fed closer to rate hike

US consumer prices accelerate in August, push Fed closer to rate hike

By Lucia Mutikani WASHINGTON, Sept 11 (Reuters) - U.S. consumer prices accelerated in August, while a key measure of underlying inflation posted its largest increase in four months, reinforcing expectations that the Federal Reserve will raise interest rates next week.
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U.S. Treasury's Bond Buyback Strategy Faces Scrutiny Amidst Rising Debt and Market Skepticism

U.S. Treasury's Bond Buyback Strategy Faces Scrutiny Amidst Rising Debt and Market Skepticism

U.S. Treasury's Bond Buyback Strategy Faces Scrutiny Amidst Rising Debt and Market Skepticism
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Stocks, bonds rally after August inflation report

Stocks, bonds rally after August inflation report

NEW YORK, Sept 11 (Reuters) - U.S. consumer prices accelerated in August as the cost of gasoline rebounded after two straight monthly declines, bolstering market expectations that the Federal Reserve will raise interest rates next week.
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No relief from inflation as Middle East clashes lifts fuel prices to painful levels

No relief from inflation as Middle East clashes lifts fuel prices to painful levels

U.S. inflation accelerated last month as gas prices spiked in the wake of renewed fighting in the Middle East, underscoring the affordability challenges that are top of mind for many voters as midterm elections near
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No relief from inflation as Middle East clash lifts fuel prices to painful levels

No relief from inflation as Middle East clash lifts fuel prices to painful levels

U.S. inflation accelerated last month as gas prices spiked in the wake of renewed fighting in the Middle East, underscoring the affordability challenges that are top of mind for many voters as midterm elections near
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Investors brace for possible rate hike at uncertain Fed meeting

Investors brace for possible rate hike at uncertain Fed meeting

By Lewis Krauskopf NEW YORK, Sept 11 (Reuters) - Investors head into next week's Federal Reserve unclear about the prospects that the central bank will hike interest rates, a move that could threaten a U.S. stock market rally already showing some vulnerability to rising bond yields. 
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ECB's hawkish stance prompts calls for further rate hikes

ECB's hawkish stance prompts calls for further rate hikes

By Rashika Singh Sept 10 (Reuters) - Goldman Sachs, Citigroup and Barclays are forecasting the European Central Bank will tighten policy further as a renewed surge in energy prices raises concerns over inflation easing back towards target.
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Bonds, stocks selloff pauses as oil falls; pivotal CPI report due

Bonds, stocks selloff pauses as oil falls; pivotal CPI report due

By Samuel Indyk and Stella Qiu LONDON, Sept 11 (Reuters) - A selloff in global bond and equity markets paused on Friday as oil prices retreated from a four-month high, though the recent surge in energy costs continued to fuel inflation worries and expectations that central banks may need to tighten
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US consumer inflation picks up in August

US consumer inflation picks up in August

By Lucia Mutikani WASHINGTON, Sept 11 (Reuters) - U.S. consumer prices accelerated in August as the cost of gasoline rebounded after two straight monthly declines, bolstering financial market expectations that the Federal Reserve could raise interest rates next week.
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Morning Bid: Lenders say show me the money as bond carnage spreads

Morning Bid: Lenders say show me the money as bond carnage spreads

A look at the day ahead in European and global markets from Stella Qiu Perhaps promising to borrow $1.3 trillion to give to every American who votes for you wasn't such a good idea.
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European Central Bank raises interest rates a quarter point to quell energy-fueled inflation

European Central Bank raises interest rates a quarter point to quell energy-fueled inflation

The European Central Bank is raising interest rates to cool inflation that is being fed by high oil prices from the Iran war