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Blokland’s daily sketch

Blokland’s daily sketch

18-03-2019

What’s up with inflation?

  • Jeroen Blokland
    Jeroen
    Blokland
    Portfolio Manager

Central banks have a pretty straightforward goal, at least on paper. They aim for price stability, which usually translates into steering the headline inflation level towards 2%. However, that has become almost impossible to achieve in practice, as traditional economic relationships seem to have broken down. For example, Eurozone headline inflation has not kept up with the gradual rise in capacity utilization. The relationships between inflation, money supply and wage growth also show signs of weakness. Hence, central banks have expanded their policy toolkit to include other instruments, with QE being the most prominent example, but have so far still not achieved the desired result.

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As a senior portfolio manager I use charts to illustrate financial issues every day. I tweet my favorites as @jsblokland and was named 'one of the 50 most important people for investors to follow in 2018' by MarketWatch.
Previous editions of the daily sketch can be found on my personal financial markets blog. All graphics provided are collected from Bloomberg data and public websites. They do not always reflect my personal opinion and may also not necessarily reflect the opinion of Robeco. Please cite all references or quote the original source if replicating content.

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