So American inflation fears picked up:
Inflation remains stubbornly elevated and unexpectedly picked up in January, a fresh reading of the Fed’s preferred index showed, underscoring the daunting challenge facing central bankers as they try to wrestle price increases back to a normal pace.
After six months of more or less consistently cooling down, the Personal Consumption Expenditures price measure climbed 5.4 percent in January from a year earlier, an unexpected pickup from 5.3 percent the prior month and substantially more than the 5 percent economists had expected.
Even after stripping out food and fuel prices, both of which jump around a lot, the price index climbed by 4.7 percent in the year through last month — also a pickup, and more than expected in a Bloomberg survey of economists.
…
Personal spending, which spans both goods and services, climbed by 1.8 percent in January. That compared to a slight 0.1 percent decline in December, and was more than the 1.4 percent increase that economists had anticipated. Even after adjusting for quick inflation, consumer spending rose at a hearty pace last month.
And there was some cheerful historical data put together:
In research released on a day when inflation data showed an unexpected spike, the authors found that over 16 episodes of “disinflation” engineered by central banks in the United States, Germany, Canada and the United Kingdom, “we find no instance in which a significant central bank-induced disinflation occurred without a recession.”
The researchers included Brandeis International Business School professor Stephen Cecchetti, who is a former top economist at the Bank for International Settlements; Michael Feroli, chief economist at J.P. Morgan; and Columbia Business School professor Frederic Mishkin, who is a former Fed governor and long-time research collaborator with former Fed Chair Ben Bernanke.
The findings were presented on Friday at a conference organized by the University of Chicago Booth School of Business, and drew pushback from Fed officials who reviewed and commented on it.
“I don’t see that we have to have this trade-off between labour and price stability. I am greedy,” Cleveland Fed President Loretta Mester said in remarks to CNBC.
In a paper issued in response to the research, she argued that the recessions associated with past disinflation may have been the result of central banks tightening policy more than necessary, not that a recession was needed to bring price increases into line.
“The implication is that policy-makers need to be attentive to the lagged effects of policy actions as they bring inflation down,” Mester said.
And the BoC has released a Staff Analytical Note by Cyrus Minwalla, John Miedema, Sebastian Hernandez and Alexandra Sutton-Lalani titled A central bank digital currency for offline payments:
- An offline central bank digital currency (CBDC) is a digital complement to bank notes. It enables transactions without the internet while still allowing online purchases when internet connectivity is available.
- The design of an offline CBDC depends on the duration of the offline period. Intermittent offline refers to a temporary internet outage, such as that caused by a failure of telecommunications infrastructure. Extended offline refers a lengthy and indeterminate outage, likely caused by a storm or other weather event. It also refers to the situation in remote regions that do not have reliable or affordable internet.
- Regardless of the length of the offline period, an offline CBDC must be spent or transferred using a digital device—for example, a smartphone with a custom application, or a purpose-designed universal access device (UAD).
- An offline CBDC offers users benefits such as enhanced resilience and better accessibility features. It could also preserve the privacy typically associated with offline payments.
- To minimize the risk of theft or loss, an offline CBDC may require secure hardware with controls to guard against unauthorized tampering, as well as a user-specific personal identification number (PIN), password or biometric authentication stored on the device itself.
- A balance must be struck between compliance, security requirements and user needs. A suitable balance may be defined by optimally selecting limits on holdings, transaction amounts and the duration of offline functionality. Adopting a security posture in terms of limits, controls and functionality, where risks are sufficiently mitigated, is still a challenge for technology available today.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.3348 % | 2,574.6 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.3348 % | 4,938.1 |
| Floater | 8.75 % | 8.95 % | 53,818 | 10.34 | 2 | -0.3348 % | 2,845.9 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.9404 % | 3,347.6 |
| SplitShare | 5.02 % | 6.79 % | 56,023 | 2.77 | 7 | -0.9404 % | 3,997.8 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.9404 % | 3,119.2 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2637 % | 2,767.3 |
| Perpetual-Discount | 6.16 % | 6.29 % | 69,624 | 13.48 | 37 | -0.2637 % | 3,017.5 |
| FixedReset Disc | 5.39 % | 7.66 % | 86,079 | 11.80 | 59 | -0.5452 % | 2,261.7 |
| Insurance Straight | 6.03 % | 6.19 % | 88,819 | 13.56 | 20 | -0.2069 % | 2,978.0 |
| FloatingReset | 9.75 % | 10.20 % | 38,148 | 9.28 | 2 | 0.0618 % | 2,629.0 |
| FixedReset Prem | 6.43 % | 6.34 % | 219,621 | 4.00 | 2 | 0.0200 % | 2,362.2 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.5452 % | 2,311.9 |
| FixedReset Ins Non | 5.26 % | 7.20 % | 46,124 | 12.20 | 14 | -0.2312 % | 2,452.1 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| IFC.PR.C | FixedReset Disc | -22.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 14.00 Evaluated at bid price : 14.00 Bid-YTW : 9.90 % |
| CU.PR.H | Perpetual-Discount | -5.80 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 20.61 Evaluated at bid price : 20.61 Bid-YTW : 6.41 % |
| PVS.PR.H | SplitShare | -5.49 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2027-02-28 Maturity Price : 25.00 Evaluated at bid price : 22.21 Bid-YTW : 8.01 % |
| BIP.PR.A | FixedReset Disc | -5.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 17.53 Evaluated at bid price : 17.53 Bid-YTW : 9.52 % |
| CU.PR.I | FixedReset Disc | -3.13 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2025-12-01 Maturity Price : 25.00 Evaluated at bid price : 24.12 Bid-YTW : 5.90 % |
| BN.PR.X | FixedReset Disc | -2.72 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 16.10 Evaluated at bid price : 16.10 Bid-YTW : 8.16 % |
| BN.PF.F | FixedReset Disc | -2.63 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 17.75 Evaluated at bid price : 17.75 Bid-YTW : 8.84 % |
| MFC.PR.K | FixedReset Ins Non | -2.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 19.40 Evaluated at bid price : 19.40 Bid-YTW : 7.58 % |
| GWO.PR.Y | Insurance Straight | -1.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 18.71 Evaluated at bid price : 18.71 Bid-YTW : 6.13 % |
| RY.PR.J | FixedReset Disc | -1.65 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 19.13 Evaluated at bid price : 19.13 Bid-YTW : 7.69 % |
| BN.PR.T | FixedReset Disc | -1.61 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 15.30 Evaluated at bid price : 15.30 Bid-YTW : 8.79 % |
| BN.PR.Z | FixedReset Disc | -1.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 21.51 Evaluated at bid price : 21.51 Bid-YTW : 7.59 % |
| MFC.PR.J | FixedReset Ins Non | -1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 22.13 Evaluated at bid price : 22.76 Bid-YTW : 6.93 % |
| BMO.PR.S | FixedReset Disc | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 18.30 Evaluated at bid price : 18.30 Bid-YTW : 7.91 % |
| BIP.PR.E | FixedReset Disc | 1.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 22.32 Evaluated at bid price : 23.09 Bid-YTW : 7.24 % |
| RY.PR.M | FixedReset Disc | 1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 18.50 Evaluated at bid price : 18.50 Bid-YTW : 7.62 % |
| MFC.PR.F | FixedReset Ins Non | 1.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 13.40 Evaluated at bid price : 13.40 Bid-YTW : 8.27 % |
| FTS.PR.K | FixedReset Disc | 1.37 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 17.05 Evaluated at bid price : 17.05 Bid-YTW : 8.16 % |
| PWF.PR.T | FixedReset Disc | 1.65 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 19.10 Evaluated at bid price : 19.10 Bid-YTW : 7.76 % |
| MFC.PR.L | FixedReset Ins Non | 1.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 17.75 Evaluated at bid price : 17.75 Bid-YTW : 8.00 % |
| FTS.PR.G | FixedReset Disc | 2.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 18.91 Evaluated at bid price : 18.91 Bid-YTW : 7.57 % |
| PWF.PR.S | Perpetual-Discount | 2.76 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 19.33 Evaluated at bid price : 19.33 Bid-YTW : 6.29 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.J | FixedReset Disc | 43,500 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 22.32 Evaluated at bid price : 23.10 Bid-YTW : 6.85 % |
| IAF.PR.I | FixedReset Ins Non | 35,500 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 22.68 Evaluated at bid price : 23.80 Bid-YTW : 6.60 % |
| BMO.PR.F | FixedReset Disc | 34,982 | YTW SCENARIO Maturity Type : Call Maturity Date : 2024-05-25 Maturity Price : 25.00 Evaluated at bid price : 24.45 Bid-YTW : 7.01 % |
| CM.PR.S | FixedReset Disc | 25,800 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 22.09 Evaluated at bid price : 22.09 Bid-YTW : 6.87 % |
| TRP.PR.D | FixedReset Disc | 20,800 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 16.40 Evaluated at bid price : 16.40 Bid-YTW : 8.96 % |
| MFC.PR.B | Insurance Straight | 20,075 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-24 Maturity Price : 19.85 Evaluated at bid price : 19.85 Bid-YTW : 5.98 % |
| There were 12 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| IFC.PR.C | FixedReset Disc | Quote: 14.00 – 18.49 Spot Rate : 4.4900 Average : 3.0634 YTW SCENARIO |
| PVS.PR.H | SplitShare | Quote: 22.21 – 23.50 Spot Rate : 1.2900 Average : 0.7569 YTW SCENARIO |
| BIP.PR.A | FixedReset Disc | Quote: 17.53 – 18.60 Spot Rate : 1.0700 Average : 0.6476 YTW SCENARIO |
| CU.PR.H | Perpetual-Discount | Quote: 20.61 – 22.06 Spot Rate : 1.4500 Average : 1.0775 YTW SCENARIO |
| CU.PR.I | FixedReset Disc | Quote: 24.12 – 24.85 Spot Rate : 0.7300 Average : 0.4040 YTW SCENARIO |
| BN.PF.F | FixedReset Disc | Quote: 17.75 – 18.42 Spot Rate : 0.6700 Average : 0.3844 YTW SCENARIO |