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With interest rate uncertainty on the rise across the market, it may be time to buy stocks with a demonstrated history of low volatility. The Cboe Volatility Index — a yardstick of expected market volatility — briefly rose above 21 on Friday, its highest level since last October. The insurance stock currently has a 5-year beta of 0.54 relative to the S & P 500, and a price volatility score of 6.28. With a 5-year beta of 0.78 versus the S & P 500 and a 5-year price volatility score of 6.50, medical equipment maker Boston Scientific also turned up on the screen. Compared to the S & P 500, Merck's 5-year beta comes in at 0.39, while its 5-year price volatility scores a 6.06.

Persons: Joanne Wuensch Organizations: CNBC Pro, Boston Scientific, Citigroup, Boston, Pharmaceutical, Merck, Food, NextEra Energy Locations: UnitedHealth

☆ New data centers require billions of dollars in utility system upgrades. You may end up paying for it.
▼ + stars: | 2024-04-18 | by ( Daniel Geiger | Ellen Thomas | ) www.businessinsider.com time to read: +15 min

A record surge of data center construction is underway to provide the computing and storage that underpins society's fast-expanding digital footprint and powers artificial intelligence. In areas of the country where data centers have clustered, utilities have unveiled plans to spend billions of dollars to keep up. asked David Springe, the executive director of the National Association of State Utility Consumer Advocates. "Then you have the data centers that are having exponential load growth," Nelson said. Data centers also don't deliver the number of long term jobs – a key yardstick for public benefits – that other industries do.

Persons: Mike DeWine, David Springe, they're, Ryan Augsburger, Augsburger, Ron Nelson, Strategen, ratepayers, Nelson, Steve Helber, That's, PJM, David Lapp, Lapp, Jeffrey Shields, Shields, Kantele Franko, Shelby Moore, Meta, behemoth Blackstone, QTS, John Gavan, Daniel Tait, Tait Organizations: Amazon, Ohioans, Business, Wall, Boston Consulting Group, National Association of State, Consumer, Ohio Manufacturers ' Association, Web Services, Energy, Dominion Energy, Federal Energy Regulatory Commission, Tech, Wall Street titans, American Electric Power, Buckeye Power, AEP, Buckeye, AEP Ohio, Staff, Intel, Policy Institute Locations: Ohio, ratepayers, Chester , Va, Virginia, PJM, Chicago, New Jersey, New York City, Maryland, West Virginia, Pennsylvania, Columbus , Ohio, Denver, New Albany , Ohio, Minnesota, Columbus, Mississippi

☆ A crucial report Wednesday is expected to show little progress against inflation
▼ + stars: | 2024-04-09 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

Scott Olson | Getty ImagesA closely watched Labor Department report due Wednesday is expected to show that not much progress is being made in the battle to bring down inflation. To be sure, inflation has come down dramatically from its peak above 9% in June 2022. That showed headline inflation running at 2.5% and the core rate at 2.8% in February. For their part, markets have grown nervous about the state of inflation and how it will affect rate policy. "I don't see a whole lot here that is going to move things magically the way they want to go," North said.

Persons: Scott Olson, We're, Dan North, North, they've Organizations: Getty, Labor Department, Federal Reserve, Allianz Trade North America, Fed, Commerce, PCE Locations: Chicago , Illinois

☆ I haven't used a clock in years. I can focus better and use calendar notifications to tell me where to be.
▼ + stars: | 2024-03-22 | by ( Megan B. Wells | ) www.businessinsider.com time to read: +4 min

I'd watch the clock and count the minutes until I got to do things such as eat lunch. It wasn't healthy, so I removed all the clocks around me and could focus more. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . I checked how long I'd been working on a particular task and whether I could justify switching focus or stopping. The author taped over appliances that didn't allow her to remove the clock, such as her oven.

Persons: —, I'd, it's Organizations: Service, Electronics Locations: —

☆ Warren Buffett's favorite market gauge hit a 2-year high, signaling stocks are heavily overvalued and could crash
▼ + stars: | 2024-03-22 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +3 min

download the appSign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read previewWarren Buffett's favorite market gauge has surged to a two-year high of 184%, signaling stocks are overvalued and could suffer a devastating crash. Investors use it to compare the overall value of the stock market to the size of the national economy. It also relies on GDP, which excludes overseas income, whereas US stocks price in the value of companies' domestic and international operations. AdvertisementYet the metric's return to the lofty levels that preceded past market disasters is a clear red flag for some experts.

Persons: —, Warren, Buffett, yardstick, Buffett's yardstick, John Hussman, Paul Dietrich, Riley Wealth Organizations: Service, Business, Wilshire Indexes, Wilshire, Nvidia, Microsoft, Federal, Nasdaq, Hussman Investment Trust Locations: Wilshire, Berkshire

☆ Opinion | Nikki Haley Is Actually Winning
▼ + stars: | 2024-02-29 | by ( Frank Bruni | ) www.nytimes.com time to read: +2 min

In her make-believe quest for the Grand Old Party’s presidential nomination, Nikki Haley seems to be having a grand old time. She’s not running for president, or at least that’s not her sole or even principal goal in 2024. She’s running for a different kind of glory, and to some degree, she’s winning it, even though she doesn’t deserve it. It’s a big, bold billboard for the new model Haley, who is taking on a titan and telling inconvenient truths. When this is all over, her speaking fees will be astronomical.

Persons: Nikki Haley, Donald Trump wasn’t, Haley, She’s, Haley grappled, It’s, Trump Organizations: Old, Trump Locations: Michigan, South Carolina, Nevada, New Hampshire

☆ Pharma and rideshare providers are among most overbought S&P 500 stocks this week
▼ + stars: | 2024-02-16 | by ( Alex Harring | ) www.cnbc.com time to read: +5 min

Despite the market's lack of direction this week, investors nonetheless poured into some specific stocks, pushing them into overbought territory. The RSI, which measures the magnitude and speed of price moves, is a popular yardstick used to evaluate whether shares are overbought or oversold. A stock with a 14-day RSI above 70 is considered overbought, signaling a possible selling opportunity. Biogen is another stock on the list that took a sizable drop this week, with shares tumbling more than 7%. But Wall Street anticipates a turnaround, with the consensus price target reflecting the potential for upside of more than 38%, according to FactSet.

Persons: Eli Lilly, Tesla, Morgan Stanley, Terence Flynn, FactSet, Uber, Stephen Bersey, Bersey Organizations: Dow Jones, Nasdaq, Federal Reserve, CNBC, RSI, pharma, Traders, Uber, Technologies, HSBC Locations: Thursday's, Biogen

☆ Here are 10 undervalued stocks in our portfolio despite some of them around record highs
▼ + stars: | 2024-02-14 | by ( Paulina Likos | ) www.cnbc.com time to read: +16 min

The PEG ratio, another valuation tool, starts with the price-to-earnings ratio and divides the P/E by estimated earnings growth. A good PEG ratio is 1 or lower. There is a major consideration when analyzing five-year valuation average comparisons: interest rates. The company's P/E ratio of 21.5 times is about 20% cheaper than peers and below its historical average of 29.6. Honeywell Price-to-earnings ratio (P/E): 19.4 P/E vs. peers: 10% cheaper P/E-to-growth ratio (PEG): 2.3 We like how Honeywell 's stock is valued post-earnings .

Persons: Bard, it's, Pacifico, Jim Cramer, Disney Price, Nelson Peltz, Jim, Peltz, Bob Iger, Honeywell Price, Nvidia Price, Nvidia's, Salesforce Price, we're, Wells Fargo, Charlie Scharf, Wynn, WYNN, Jim Cramer's, NVDA, New York Stock Exchange Michael Nagle Organizations: Apple, Microsoft, Meta, Nvidia, Google, Gemini, Amazon, Services, Constellation Brands, Modelo, Beer, Constellation, . Management, Disney, Management, Honeywell, Aerospace, Productivity Solutions, Starbucks, Wells, Silicon Valley Bank, Wynn Resorts EV, Wynn Resorts, Boston, WYNN, CNBC, New York Stock Exchange, Bloomberg, Getty Locations: FactSet, Corona, China, Israel, Wells Fargo Price, Wells Fargo, Silicon, Macao, Las Vegas

☆ Imagine a better climate pact than COP
▼ + stars: | 2023-12-04 | by ( Hugo Dixon | ) www.reuters.com time to read: +7 min

It’s possible to imagine an alternative, better way to fight climate change. The snag is that China or the United States – which were responsible for 25% and 11% of greenhouse gases, respectively, in 2021 – would have to take the lead. All countries agreed to limit global warming to 2 degrees Celsius above pre-industrial times and to aim for 1.5 degrees. That’s the thinking behind the Just Energy Transition Partnerships that the United States and its allies have cut with Indonesia, Vietnam and South Africa. For example, Donald Trump, who as president pulled the United States out of the Paris Agreement, may return to the White House after next year’s elections.

Persons: Vladimir Putin, Xi Jinping, Donald Trump, Peter Thal Larsen, Thomas Shum Organizations: Reuters, of, UN, United, Rio Earth Summit, European, Reuters Graphics Reuters, China, African, Initiative, World Bank, Thomson Locations: Nations, Dubai, China, United States, Paris, U.S, Washington, Beijing, European Union, Japan, Canada, South Korea, United Kingdom, Russia, Russian, Xi Jinping . Washington, India, Brazil, Indonesia, African Union, Vietnam, South Africa

☆ Here are the biggest tech stock buys by major investors
▼ + stars: | 2023-11-24 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

Technology stocks have been powering this year's stock market rally despite the threat of elevated interest rates staying higher for longer. For a better illustration of position changes over the course of the quarter, Dick estimated the notional value of the tech buying using "volume-weighted average prices" (VWAP), a common Wall Street yardstick, last quarter. Meta was the stock that saw the strongest buying from professional investors last quarter, Bank of America said. Meanwhile, Activision Blizzard also saw elevated buying from big investors betting that the merger with Microsoft would get regulatory approval and close. Other well-loved tech names that saw increased buying included Uber, Qualcomm , DataDog and Intel .

Persons: Michael Dick, Dick, Meta, Airbnb Organizations: Securities and Exchange Commission, Bank of America, Technology, Media, Telecommunications, Nasdaq, Meta, Activision Blizzard, Microsoft, Uber, Qualcomm, DataDog, Intel Locations: Airbnb

☆ Opinion | Israel, Hamas and the Rules of War
▼ + stars: | 2023-11-17 | by ( ) www.nytimes.com time to read: +4 min

By placing military targets in and under civilian structures, it is Hamas that violates laws of war. Mr. Bartov is mute about Israel’s hundreds of phone calls to Gazans warning them to leave buildings in which Hamas fighters were located. To the Editor:In an urgent effort to prevent genocide, Omer Bartov writes about the horrific carnage committed by Israel in Gaza. But to live and die in a world that makes distinctions between crimes against humanity, war crimes, genocide, proportionality, etc., you can lose sight how all of it is utter madness. Robert RothNew YorkTo the Editor:Re “Measuring Israel by the Yardstick of a ‘Just War,’” by A. Walter Dorn (Opinion guest essay, Nov. 13):Professor Dorn examines whether Israel is adhering to the moral framework of “just war” theory.

Persons: Omer Bartov, Bartov, ”, Israel, Norman J.W, Goda Jeffrey Herf Mr, Goda, Herf, Robert Roth, Walter Dorn, Dorn, David Westrich, Robert N, Cahn Organizations: Hamas, Center for Jewish Studies, University of Florida, University of Maryland, College, York, Congressional Locations: Israel, Gaza, David Westrich Teaneck, N.J, Creek, Calif

☆ IMF says central bank digital currencies can replace cash: 'This is not the time to turn back'
▼ + stars: | 2023-11-15 | by ( Sheila Chiang | ) www.cnbc.com time to read: +2 min

SINGAPORE — Central bank digital currencies have the potential to replace cash, but adoption could take time, said Kristalina Georgieva, managing director of the International Monetary Fund on Wednesday. "CBDCs can replace cash which is costly to distribute in island economies," she said Wednesday at the Singapore FinTech Festival. CBDCs are the digital form of a country's fiat currency, which are regulated by the country's central bank. They are powered by blockchain technology, allowing central banks to channel government payments directly to households. Several central banks have already launched pilots or even issued a CBDC," the IMF said in a September report.

Persons: Kristalina Georgieva Organizations: International Monetary Fund, IMF, Singapore FinTech, Bank for International, Atlantic Council Locations: SINGAPORE — Central, Singapore

☆ Opinion | Measuring Israel by the Just-War Yardstick
▼ + stars: | 2023-11-12 | by ( A. Walter Dorn | ) www.nytimes.com time to read: +8 min

While Israel easily has just cause and constitutes a legitimate authority, its case is far weaker regarding the other five criteria. In addition, the fact that Hamas has violated these principles does not absolve Israel from an obligation to live up to higher moral standards. So the downside of Israel’s war outweighs any benefit. Israel can rightly claim that its ground invasion helps Israeli forces better distinguish Hamas fighters from civilians. Just-war theory reinforces the human instinct to not only preserve human life but also lament its loss, and to try to find solutions.

Persons: Israel’s, —, Benjamin Netanyahu’s, Netanyahu’s, Israel, Abraham, Netanyahu, Hamas’s Organizations: Hamas, Criminal, United Nations Charter, Palestinian, Palestinian Authority, West Bank, Abraham Accords, Civilian Locations: Gaza, Israel, The Hague, Oslo Accords, United States, Israeli, Lebanon, Syria, Saudi Arabia

☆ France's Federation Studios seeks advisers ahead of possible sale– sources
▼ + stars: | 2023-11-09 | by ( Amy-Jo Crowley | ) www.reuters.com time to read: +2 min

The company is considering options including a full or partial sale to another private equity firm, one of the people added. In the event of a sale, the business could be valued at more than 500 million euros, this person added. Deliberations are at an early stage and a sale process may not occur, said the people, who declined to be named because the talks are not public. Montefiore and Federation Studios declined to comment. A sale process for Spanish broadcasting and sports rights group Mediapro is also underway, according to Reuters.

Persons: Isabel Marant, Pascal Breton, Breton . Montefiore, Amy, Jo Crowley, Anousha Sakoui, Mark Potter Organizations: France's Federation Studios, des, Federation Studios, Montefiore Investment, Breton . Montefiore and Federation Studios, Vertigo Films, Reuters, Federation, Thomson Locations: Paris, Britain's, Rome, All3Media, Los Angeles, Madrid, London, Berlin, Cologne, Tel, Aviv

☆ Here's how much the options market expects Apple shares to move off earnings
▼ + stars: | 2023-10-30 | by ( Michael Khouw | ) www.cnbc.com time to read: +7 min

It's a big week: a Federal Reserve meeting, unemployment numbers and earnings for the biggest company in the S & P 500. The problem is the S & P 500, as a barometer of economic health, much like Pollyanna, skews optimistic by nature of its design. By contrast to the S & P, the R2K tracks smaller, less well-known businesses. In this way a call option will increase in value if the stock price rises through the strike price. In this case the "at-the-money" straddle expiring this coming Friday, November 3rd, is priced at $7.70 or nearly 4.6% of the current stock price.

Persons: Berkshire Hathaway, Tesla, Eli Lilly, ytd, Russell, Friday's Organizations: Reserve, U.S, Apple, Microsoft, Nvidia Locations: Europe, China, U.S, Berkshire

☆ Stock futures edge higher on Sunday night as Wall Street awaits big tech earnings: Live updates
▼ + stars: | 2023-10-22 | by ( Lisa Kailai Han | ) www.cnbc.com time to read: +2 min

Traders work on the floor of the New York Stock Exchange (NYSE) on October 20, 2023 in New York City. Stock futures ticked higher on Sunday night as traders looked ahead to the release of corporate earnings from tech industry behemoths. S&P 500 futures and Nasdaq 100 futures climbed 0.23% and 0.15%, respectively. Earnings season ramps up this week, with a slew of big tech titans slated to report. Investors will anticipate results from Alphabet , Amazon , Meta and Microsoft to provide key information for the stock market.

Persons: Jerome Powell, Ryan Detrick Organizations: New York Stock Exchange, Stock, Dow Jones, Nasdaq, Treasury, Federal, Economic, of New, Meta, Microsoft, Carson Group Locations: New York City, of New York

☆ Nobel economist Paul Krugman gets trolled for saying inflation is over if you just exclude most of what people buy
▼ + stars: | 2023-10-13 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +4 min

Paul Krugman was mocked for declaring inflation is over based on a heavily adjusted measure. The Nobel economist shared a chart that excluded basics like food, energy, shelter, and used cars. His X post was still at the top of the popular Wall Street Bets subreddit on Friday morning. "A totally ridiculous measure," Jim Bianco, president and macro strategist of Bianco Research, said about Krugman's chart in an X post. Krugman, a retired MIT and Princeton economics professor, admitted to being too dismissive in a follow-up X post on Friday.

Persons: Paul Krugman, Krugman, —, Jim Bianco, Chris Martenson, Martenson, he'd, They've Organizations: Service, Index, New York Times, Bianco Research, Prosperity, MIT, Princeton, Federal Reserve

☆ To fix Britain, Labour will need new debt rules
▼ + stars: | 2023-09-29 | by ( Francesco Guerrera | ) www.reuters.com time to read: +7 min

Having fiscal rules – and sticking to them – is crucial for governments. The Bank of England expects anaemic GDP growth of 0.5% next year and 0.25% in 2025, and long-term growth of just 1%. Reuters Graphics Reuters GraphicsThe Labour leadership is concerned that rewriting debt rules would unsettle bond investors still scarred by Truss’s fiscal follies. What Britain’s next government shouldn’t do is obsess about restrictive fiscal rules at the expense of investments that could get the country out of its current hole. The reports said that Sunak was looking at scrapping the portion of the project linking the northern cities of Manchester and Birmingham because costs have been soaring from the original 55.7 billion pounds to an estimated 106 billion pounds.

Persons: Grant Shapps, Liz Truss, Rishi Sunak, Jeremy Hunt, Hunt, Keir Starmer, Worth ”, Ian Ball, Willem Buiter, John Crompton, Dag Detter, Jacob Soll, Crompton, Breakingviews, PSNW, –, Rachel Reeves, Labour’s, “, Reeves, Britain’s, Sunak, George Hay, Oliver Taslic Organizations: Reuters, Sunday, Sky News, Labour, Conservative, Bank of England, Sunak’s, Worth, Reuters Graphics Reuters, Britain’s, Thomson Locations: Britain, New Zealand, Zealand, Manchester, Birmingham

☆ Why Warren Buffett thinks interest rates exert a huge gravitational pull on asset values
▼ + stars: | 2023-09-24 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

The Federal Reserve sent a strong signal this week that interest rates will stay higher for longer. "Interest rates are to the prices of all assets like gravity is to the function of the earth," the Berkshire Hathaway CEO said in a 2012 interview. "Everything is based off interest rates... Buffett, the so-called "Oracle of Omaha," believes that when interest rates are low, they make any stream of earnings from investments worth more. "The most important item over time and in valuation is obviously interest rates," Buffett once said.

Persons: Warren Buffett, Berkshire Hathaway, Buffett, I'd, You've Organizations: Federal Reserve, Berkshire, Tokyo, Treasury Locations: It's, Omaha

☆ Gucci’s new designer Sabato de Sarno makes himself known
▼ + stars: | 2023-09-22 | by ( Scarlett Conlon | ) edition.cnn.com time to read: +4 min

Yet, if Gucci’s new designer Sabato de Sarno was rattled before he took his bow for the Italian luxury house at Milan fashion week on Friday, he didn’t show it. Where Michele was an overt maximalist with retro references, de Sarno mined the Gucci archive and codes in a more stripped-back way. Oxblood red dominated the collection, inspired by The Savoy hotel in London where Guccio Gucci worked in the late 1800s. The bling was, in fact, a reference to the Marina jewelry collection that appeared in Gucci campaigns in the late 1960s. The rest of the embellished crystal designs were inspired by embroideries de Sarno found on 1960s clutch bags in the Gucci archive.

Persons: Milan, Sabato de Sarno, Alessandro Michele’s, De Sarno, Julia Roberts, Ryan Gosling, Jessica Chastain, Kendall Jenner, Julia Garner, Francois, Henri Pinault, Swan, Gucci Ancora ”, ‘, de Sarno, Prada, Gabbana, Valentino, Michele, Jackie, —, Guccio Gucci, Daniele Venturelli, “ Rosso Ancora, ”, Sabato De Sarno, Gucci, Kering, Daria Werbowy, Tom Ford Gucci, embroideries de Sarno Organizations: Milan CNN, Brera, Gucci, Dolce Locations: Milan, ‘, Savoy, London, Naples

☆ The Fed would be 'flying blind' on interest rate decisions after a government shutdown
▼ + stars: | 2023-09-20 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Could the Fed hike in December instead? Labor's consumer price index is a widely followed measure by the public and also figures into Fed calculations. While they aren't the only inflation gauges central bank officials use, not having them around in November would complicate the rate decision. Bank of America, though, expects the Fed to approve one more hike, which would take its key borrowing rate to a target range of 5.5%-5.75%. Correction: Another hike by the Fed would take its key borrowing rate to a target range of 5.5%-5.75%.

Persons: Aditya Bhave, Bhave, — CNBC's Michael Bloom Organizations: Federal Reserve, Bank of America, Labor, Commerce, Bank of America U.S, Fed

☆ Opinion | The Unfinished Pursuit of a Better Poverty Measure
▼ + stars: | 2023-09-11 | by ( Peter Coy | ) www.nytimes.com time to read: +2 min

It’s widely agreed that the official poverty measure — the one that showed an uptick in poverty last year — is outdated and inaccurate. The supplemental poverty measure is better, but it has problems of its own. It’s sometimes described as a “quasi” relative measure, which makes me queasy. An absolute measure of poverty sets a threshold for what constitutes poverty and sticks with it year after year, adjusting only for inflation. A relative measure sets the poverty threshold in relation to how other people live — for instance, as a percentage of the median income — so poverty tends to get redefined upward over time.

Persons: Adam Smith Organizations: Bureau, Scottish, Nations Locations: Europe

☆ Wall St mixed, dollar gains after inflation data
▼ + stars: | 2023-08-31 | by ( Stephen Culp | ) www.reuters.com time to read: +4 min

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 29, 2023. European shares reversed earlier gains to close lower as falling consumer staples and luxury stocks offset gains in financials and real estate. Emerging market stocks lost 0.78%. The dollar index (.DXY) rose 0.41%, with the euro down 0.71% to $1.0846. U.S. Treasury yields were last a bit lower in choppy trading after data reinforced expectations that the Fed will hold interest rates steady in September.

Persons: Brendan McDermid, Dow, Joseph Sroka, we’ve, Sroka, Brent, Stephen Culp, David Evans, Nick Zieminski Organizations: New York Stock Exchange, REUTERS, Federal Reserve, Nasdaq, Commerce, PCE, CPI, PPI, Fed, Dow Jones, Japan's Nikkei, European Central Bank, Treasury, Thomson Locations: New York City, U.S, Atlanta, financials, Asia, Pacific, Japan, OPEC

China, Brazil's largest trading partner, funneled $1.3 billion in direct investments into the country last year, the lowest level since 2009, according to a CEBC study. The performance contrasts with overall foreign direct investment (FDI) in Brazil in 2022, which skyrocketed by 95% to $90.6 billion, highest in a decade. Last year, just 28% of announced Chinese projects worth $4.7 billion went ahead, the CEBC said. That compares poorly with 2021, when pledged investments of $5.9 billion were fully realized, bolstered by two oil projects worth nearly $5 billion. Chinese mining firm Honbridge (8137.HK), for example, announced investments worth $2.1 billion that failed to proceed due to a pending environmental license.

Persons: Cariello, Hua Sheng, Getulio Vargas, Luiz Inacio Lula da Silva, Bernardo Caram, Tom Hogue Organizations: Brazil tanked, China Business Council, HK, U.S ., Sao Paulo Business Administration School, Getulio Vargas Foundation, Thomson Locations: BRASILIA, Brazil, China, Ukraine, U.S, Asia, Beijing

☆ Has the War on Inflation Already Been Won? - The New York Times
▼ + stars: | 2023-08-22 | by ( Paul Krugman | ) www.nytimes.com time to read: +1 min

Money is the economy’s unit of account, the yardstick we use to calculate profit and loss, make contracts, specify debts and more. It’s problematic when that yardstick keeps changing length, when you have to worry about how much stuff a dollar will buy in the future. Nonetheless, the Federal Reserve, like all major central banks these days, doesn’t aim for complete price stability, or in other words, for 0 percent inflation. Mainly because an economy with modest inflation will normally have somewhat higher interest rates than one with zero inflation — a phenomenon known as the Fisher effect. And this means that low but positive inflation gives the Fed more room to cut rates in the face of a recession.

Persons: Flation, Fisher Organizations: Federal Reserve

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