World Economic News – Friday 07/10/2022

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GERMANY

Import prices were 32.7% higher in August 2022 compared with August 2021, The Federal Statistical Office (Destatis) reported on Friday. This was the highest increase since March 1974 (+35.0% compared to march 1973). The year-on-year rate of change had been +28.9% in July 2022 and +29.9% in June 2022. Compared with July 2022, import prices were up 4.3% in August 2022.

US

Federal Reserve Bank of Cleveland President Loretta Mester said that the Fed must be “singularly focused” on inflation and not stop until it drops to the 2% target, meaning no rate cuts at all in 2023. She went on to say that real rates must turn positive and stay that way “for a while” to bring prices down.

ASIA

Asian currencies will likely continue weakening for another quarter — if not more, as U.S. interest rates rise, the Economist Intelligence Unit (EIU) said. The EIU said it expects further interest rate hikes by the Federal Reserve in November and December, although “the risk is rising that rate increases will occur at a faster pace than we currently anticipate.”

AUSTRALIA

Australia’s financial system remained resilient and well positioned to support the economy through a more challenging period, the Reserve Bank of Australia said in its half-yearly Financial Stability Review, released Friday. The RBA also said banks have strong capital and liquidity positions.

SERBIA

The National Bank of Serbia raised its reference rate by 50 bps to 4%, marking the seventh straight hike and in line with markets expectations. The annual inflation rate in Serbia rose to 13.2% in August of 2022, the highest reading since May 2011,