It doesn’t just matter to Americans who keep their wallets. Price increases are also being closely scrutinized by investors and economists, who desperately want to know: is this a passing phenomenon as the country emerges from a single economic shock or a more sustained trend that evokes the 1970s?
The answer to this question will have enormous consequences for the financial markets. If the Federal Reserve starts to think there is a real problem with inflation, it could raise interest rates or reduce its bond purchases sooner than expected. This would trigger a massive sell off of high growth assets, the rise of which set the tone for investing in the pandemic era.
But wait: The Federal Reserve has made it clear that it believes inflation will be transient.
Most economists agree with this point of view, even if they admit that we are in unprecedented territory. In an article published Friday, leading economists including Laurence Ball of Johns Hopkins University and Gita Gopinath, chief economist of the International Monetary Fund, said they expected “a modest rise in inflation and temporary ”and note that public spending under the Biden administration does not appear to be a threat.
“Overall, we see little risk that the current temporary government spending for pandemic relief will cause an inflationary spiral,” they wrote.
Proposals for additional spending on infrastructure, jobs and health care, economists added, are worth watching. But since the expenses are ‘likely to be spread over a longer period [and] be partially offset by fiscal measures “which” could limit fears of overheating “.
Private equity targets sport. Fans push back
In New Zealand, rugby is not just a sport. It is a national obsession, a major cultural force and immense pride.
So the news that Silver Lake, a California-based private equity firm, is seeking to buy 12.5% of the revenue generated by the All Blacks, the dreaded national team that has dominated world sport for decades, has sparked debate. fierce in the land of 5 million.
“It’s really awful,” New Zealand actor Sam Neill, best known for his role in the “Jurassic Park” franchise, tweeted earlier this week. ” The [All Blacks] are in danger of becoming just another bloody corporation. “
Last week, the provincial unions that govern the sport in New Zealand gave the deal, which would see Silver Lake invest $ 279 million, their unanimous approval. But approval is still needed from the top players, who have expressed concerns about the very handing over of minority control.
“It’s not about the money,” All Blacks veteran Dane Coles said in an interview with local media. “It’s about leaving the game in good hands and having as bright a future as possible. “
Silver Lake, which has $ 79 billion in assets under management, declined to comment on CNN Business.
Deadlock is the latest example of fans and players opposing the big money flowing into sports by billionaires, corporations and investors, whom some accuse of prioritizing profit over tradition. Fans clinched a major victory in that fight last month, rebelling against a planned European Super League that would have enriched a small number of owners but went against the traditions of European football.
Private equity firms, which buy and restructure businesses in the hope of making a profit, are at the forefront of sports investing. They target teams, tournaments and governing bodies, promising much needed funding and business acumen. But in some cases, they invest despite the objections of suspicious fans.
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