Hotter-than-expected inflation figures in the United States were the big global economic development this week, and the implications for Australia are significant. Just not in the way you might think.
The rising US CPI figures are not great news for Joe Biden, who is behind in the polls against a resurgent Donald Trump (who unsurprisingly seized on the numbers to attack his rival). They also led to significant moves for stocks, with the Dow Jones Industrial Average sliding to two-month lows and money markets pushing back expectations for easing in the US until the end of the year.
Former Treasury Secretary Larry Summers even went as far as suggesting that the next move for rates in the US could be up, not down.
So what does all of this mean for Australia? In a narrow sense, not that much.
