Global Markets: High U.S. inflation to remain for years

WINNIPEG – The following is a glance at the news moving markets in Canada and globally.

– Bank of America’s top strategist Michael Hartnett said in a note on Friday that the bank expects inflation in the United States to remain elevated for two to four years, which contradicts the Federal Reserve’s assertion that high inflation would be temporary. Hartnett believes inflation would remain at two to four per cent over that time period, but it has annualized at an eight per cent rate so far in 2021.

– The rate of consumer spending in the U.S. was unchanged in May compared to the month before, according to a report released on Friday by the U.S. Bureau of Economic Analysis. However, consumer spending has exceeded pre-pandemic levels over the past few months. Consumers are spending more on dining out, travel, vacations and recreation, and less on goods.

– European Union leaders at a summit in Brussels shot down a proposal by German Chancellor Angela Merkel and French President Emmanuel Macron on Friday to hold formal talks with Russian President Vladimir Putin. Many leaders were surprised to see the proposal on the agenda and Eastern European leaders were prepared to veto the proposal. The EU has not had formal talks with Putin since Russia annexed Crimea in 2014.

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