The headwinds of rising debt and persistent inflation

Advanced economies in the West are facing the twin headwinds of rising government debt and persistent inflation, writes RSM Chief Economist Joe Brusuelas in the November issue of The Real Economy.

With most of the G7 nations deep into a postpandemic interest rate regime change, conditions are coalescing for higher inflation across most of the advanced economies, especially as the fiscal authorities embrace higher government spending.

This new economic landscape is posing a challenge for central banks, which are trying to strike a balance between fostering growth and maintaining price stability, and for middle market businesses, which must contend with elevated input costs.

Also in this issue, RSM’s Peter Ramer looks at the back-to-school shopping season and what it says about the prospects for the all-important holiday shopping season for consumer products companies. Holiday spending, he writes, will mirror back-to-school trends: fewer purchases among consumers, select splurges and promotion-driven buys.

Finally, in our Market Minute series, Brusuelas looks at a global economy in transition, from the American dollar’s dominance in foreign exchange markets to the longer time it is taking rate cuts by the Federal Reserve to show up in the real economy.

Read our analysis of these topics in the latest edition of The Real Economy.