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Germany’s inflation surges to 2.4% as it narrowly skirts a technical recession

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4 weeks ago

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Passers-by walk in the pedestrian zone of the Bavarian capital.

Peter Kneffel | Picture Alliance | Getty Images

Germany’s inflation surged to 2.4% in October, back above the European Central Bank’s 2% target, even as the country narrowly avoided a technical recession in the third quarter.

The preliminary print, announced by German statistics office Destatis, is harmonized across the euro area for comparability.

Analysts polled by Reuters had been expecting harmonized inflation to come in at 2.1% in October.

Harmonized inflation had dropped to 1.8% in September, after coming in at the European Central Bank’s 2% target in August.

So-called core inflation, which strips out more volatile food and energy costs, came in at 2.9% in October, the German statistics office said Wednesday, an increase from the 2.7% reading of September.

Services inflation also nudged higher to 4% in October, from 3.8% in the previous month.

The data comes after Destatis earlier on Wednesday posted a preliminary reading of Germany’s gross domestic product, which grew 0.2% in the third quarter compared to the previous three months.

The increase surprised analysts polled by Reuters who had anticipated a 0.1% decline, allowing Germany to narrowly avoid a technical recession — which is marked by two consecutive quarters of contraction.

Destatis also revised down the second-quarter GDP figures to a 0.3% contraction, from a previously reported 0.1% dip.

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Economics

Checks and Balance newsletter: Trump is embracing a shift in Republican priorities

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17 hours ago

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November 23, 2024

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Will he follow through on his policy commitments?

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Economics

Donald Trump chooses hedge fund executive Scott Bessent for Treasury Secretary

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1 day ago

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November 22, 2024

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Scott Bessent, founder and chief executive officer of Key Square Group LP, during an interview in Washington, DC, US, on Friday, June 7, 2024.

Stefani Reynolds | Bloomberg | Getty Images

President-elect Donald Trump has signaled his intention to nominate hedge fund executive Scott Bessent as his Treasury secretary, sources tell CNBC and NBC News.

The founder of Key Square Group had been considered a strong favorite for the position along with a few other close contenders.

As head of Treasury, Bessent, 62, will be both the U.S. fiscal watchdog as well as a key official to help Trump enact his ambitious economic agenda. Both a Wall Street heavyweight and advocate for many of the incoming president’s economic goals, he would come to office at a critical time as the U.S. wrestles with a growing economy alongside long-festering debt and deficit issues.

Like Trump, Bessent favors gradual tariffs and deregulation to push American business and control inflation. In addition, Bessent has advocated for a revival in manufacturing as well as energy independence.

The prospective nominee also has deep philanthropic ties through Yale University along with Rockefeller University and Classical American homes Preservation Trust.

One obstacle Bessent will have to overcome is his past affiliation with billionaire investor and global gadfly George Soros. Bessent served as chief investment officer for Soros’ fund.

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Economics

Trump might name Kevin Warsh as Treasury chief then Fed chair later, report says

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2 days ago

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November 22, 2024

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Kevin Warsh

Jin Lee | Bloomberg | Getty Images

President-elect Donald Trump is considering naming Kevin Warsh as Treasury secretary then ultimately sending him off to serve as Federal Reserve chair, according to a Wall Street Journal report.

A former Fed governor himself, Warsh would move over to the central bank after current Chair Jerome Powell’s term expires in 2026, according to the Journal, which cited sources familiar with Trump’s thinking.

The speculation comes with Treasury being the last major Cabinet position for which Trump has yet to state his intention.

Various reports have put Warsh as one of the finalists with Apollo Global Management CEO Marc Rowan and hedge fund manager Scott Bessent. Among the potential scenarios would be one where Bessent would lead the National Economic Council initially then go over to Treasury after Warsh takes over at the Fed.

However, Trump is known for the propensity to change his mind, and the report noted that nothing has been finalized.

Read the full Wall Street Journal story here.

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