Fed Chairman Jerome Powell On an issue that the Fed misjudged inflation while making a presentation in the US House of Representatives “Looking back, they underestimated inflation, it wasn’t temporary” said. Remembering that every central bank must make the same decision, Powell “That was the decision we had to make. We knew it could be wrong. We changed course when it started to look pretty wrong.” She said.
Powell’s two-day semi-annual presentation to Congress is that they want to reduce inflation at the expense of rising unemployment and cause a recession, and that the needle is closer to a 75 basis point increase at the July meeting.
THE NATURAL GAS CRISIS IN EUROPE
“With the effect of these speeches, recessionary prices in global markets have deepened. So much so that commodity prices are also falling because there will be a recession in the global economy.
The price of oil is also falling. Admittedly, US President Biden’s efforts have had an effect on this. We addressed the problem in our article yesterday.
➔Natural gas prices show a continental trend. For example, in the US it is falling, but in Europe there is a total crisis. Why Russia throttled the gas valve.
➔It is a shocking situation for Europe, which fills its warehouses in summer and prepares for winter. Warehouses that are not filled in the summer will not be enough in the winter. If the air is coming from pipes instead of natural gas, regular cuts will be required.
➔ The first cut to be sacrificed will be the workplace. If the industry shutdown results in job cuts, as is likely to happen, a recession will knock on the door.
➔Therefore, the price in megawatt hours of the European reference TTF for natural gas rose yesterday to 138 euros. Two weeks ago the price was 77 euros. This means an 80 percent increase. And in June.
2 WEEKS DECREASE IN GOODS BY 10%
➔It can be said that almost all commodities except natural gas have recessionary prices. Here because The CRB Commodity Index fell 10% in two weeks.
➔ Act as a barometer of global growth copper also dropped by 14% in two weeks.
➔The decrease in iron ore from metals is 24%, while the decrease in steel over the past 1.5 months is 18%. The drop in the CRB Metal Index is 24%.
➔China is the leading player in both production and consumption, especially in the steel sector. It is common for prices to fall due to slowing production and demand due to epidemic measures in China.
➔There is also a crisis in the construction sector in this country. The decline and recession in prices reached the eleventh month. Furthermore, the fear of the world economy going into recession is a good reason for the decline in iron and steel prices.
FOOD PRICES FALLED BY 15% WORLDWIDE
➔More interesting the wave of recession that takes away food prices. Yet The 2-week drop in the CRB Food Index reached 15%. This drop in prices can also be reflected in the FAO Food Index. We can see the price declines that started in June in the inflation data with some time shift.
➔The price of wheat had risen to $ 1,350 per 100 bushels at the start of the Russia-Ukraine war. Wheat, which was $ 1,205 a month ago, was yesterday It fell 22.5% to $ 934.. Wheat prices were below $ 800 before the war.
➔The increase in prices with the war was due to the fact that Ukrainian wheat was locked up in the blocked ports of the Black Sea. Mainly because of the mines, both the safety of the ships were in danger and were not insured.
➔It appears that a safe corridor is planned at the initiative of Turkey and transport of Ukrainian grain is on the way. In the first phase, 30 million tons of wheat will be transported. There will be room for the new product in the silos.
WILL FOOD CONSUMPTION BE REDUCED NOW?
➔Recession prices are sweeping everything away for now. The drop in commodity prices undoubtedly means double doping for Turkey. Both the import bill will decrease and inflation will not be imported from abroad or will decrease.
➔But the markets cannot be trusted. You don’t know where the wind is blowing from. When growth turns to stagnation, energy consumption and metal consumption decrease. The world population does not decrease so that the food to be consumed decreases.
➔A global food crisis was feared just a few weeks ago. The food crisis stems from lack of access to food, either due to famine or because prices are too high.
Also Fatih Birol, Director of the International Energy Agencywith the determination of It is in the midst of the global energy crisis. Reducing the price of a scarce product due to the exclusion of Russia can be achieved for a short time, but it is unlikely to be permanent.