BOE Pill. The 2nd round effects of inflation may be stronger.
The BOE’s Pill is speaking and says:
- The 2nd round effects on inflation may be stronger
- They should be focused on attacking those 2nd round effects on inflation
- We must not allow ourselves to drift off into deep space of unmoored inflation dynamics
- They do not expect 2nd round effects to be as deep as 2022.
- Disinflation stalled before the Iran conflict.
- Latest GDP shows some robustness.
- Labor market weakness means 2nd round effects likely to be weaker than in 2022
- Not clear labor market is as loose as when there were oil price spikes in 2008 and 2011.
Pill is kinda speaking out of both sides of his mouth. He says he is concerned about 2nd round effects but sees slower labor keeping 2nd round effects as being contained.
The GBPUSD istrading to new session lows as the USD buying and the political uncertainty weighs on the GBP. The price is also breaking below the 100 day MA at 1.3481 . Recall from yesterday price bounced off that level.
Wes Streeter
This article was written by Greg Michalowski at investinglive.com.