Economy

CAPE TOWN (Reuters) – Zambia’s President Hakainde Hichilema is pleased China will co-chair a creditor committee with France during debt negotiations, he told Reuters on Monday, adding that a partial write-off of the country’s $32 billion debt was on the table.Hichilema said Zambia aims to avoid another debt default after it became in 2020 the first country in the pandemic era to default on its debt. “The overall approach is to rein in on the debt, which starts with ceasing to borrow recklessly going forward, especially not borrow at high cost,” Hichilema said during an interview with Reuters on the sidelines of the Mining Indaba conference in Cape Town. “Now that we have this common framework … we are seeking a reduction in the debt as part of the package. Everything is on the table,” he said.Zambia, Africa’s second-biggest copper producer, is struggling to jumpstart its economy as it grapples with a debt load reaching 120% of GDP. Since Hichilema’s election last August, Zambia has implemented business-friendly reforms and investor sentiment has improved, with the kwacha currency increasing in value against the dollar.Zambia’s debt totalled $31.74 billion at the end of 2021, according to official government data – of which $17.27 billion was external debt. China held $5.78 billion of the external debt.The first meeting of the creditor committee is expected to take place next week, Finance Minister Situmbeko Musokotwane told Reuters in the same interview. He reiterated that debt talks should end in June, a timeline analysts consider ambitious.Musokotwane had said previously that debt negotiations were “stalled” at International Monetary Fund meetings last month, after Zambia secured a staff-level agreement on a $1.4 billion three-year credit facility with the fund in December.Zambia aims to increase copper production more than three-fold, to 3 million tonnes of copper a year within the next decade. The country produced 800,696 tonnes of copper in 2021.It also aims to increase production of wheat and maize in order to export, Hichilema said, adding that the country has held talks with the European Union among others about providing wheat to the bloc.Asked whether Zambia would welcome Russian companies investing in the mining sector, Hichilema declined to answer, but said “we are against the war in Ukraine”. Zambia voted in March in favour of a United Nations resolution condemning Russia’s invasion of Ukraine. More

Ajay Rajadhyaksha is global chair of research at Barclays.At the end of the first quarter, financial markets seemed to be in a reasonable place. Sure, the Federal Reserve had pivoted hastily towards tightening monetary policy, and the Russia-Ukraine war was a nasty shock, adding to already high inflation. But the Fed was talking tough, and investors seemed to take heart.The S&P 500 was just 4-5 per cent off all-time highs by late March, and the 10-year US Treasury yield was hovering around 2.4 per cent. The main measure of the US yield curve did turn negative on March 30, but if equity investors were concerned, they hid it well — the Vix volatility index was below 20 in the last week of March.Just a few weeks later, the financial world looks worse. Much worse. After dropping 4.6 per cent in the first quarter, the S&P 500 tumbled 9 per cent in April, the worst monthly performance since March 2020. May has brought little respite. At pixel-time, European shares remain under pressure, and futures indicate that the US equity market pain will deepen when the New York Stock Exchange opens. Corporate earnings are not to blame. By Barclays’ estimates, companies are beating earnings forecasts at a record pace in both the US and Europe. But equities are ignoring earnings and taking their cue from bonds, which are having a horrific year. The US 10-year Treasury yields jumped 80 basis points from the start of April to above 3 per cent for the first time since 2018. It’s now close to a one-decade high.

The 10-year US Treasury yield

There are ripple effects everywhere; Italian bond yields near decade highs, the US dollar on a tear, Vix above 30, and the Nasdaq in a bear market. Also of note is the US yield curve now steepening, even though the Fed hiked by 50 bps for the first time in two decades last week, and hinted that more half-percentage point increases are coming.So what has worsened in these five weeks? What explains this sudden shift in market sentiment?Not US inflation data. The last core CPI print was soft, rising 0.3 per cent month-over-month, or less than 4 per cent annual. Core PCE inflation — the Fed’s own preferred measure — ran below 0.3 per cent month-on-month in February and March. Average hourly earnings in the US are also levelling off, with the three-month average at 0.3 per cent. And used vehicle prices are dropping for the third month in a row. It’s hard to blame recent inflation data for the bond market puke.So if it’s not data, and it’s not earnings, then why are financial assets — led by the nose by fixed income — doing so miserably? I think bond investors are picking up on a shift in the Fed’s rhetoric, and not liking what they hear.

Sure, Fed officials are still in a hurry to get to neutral “expeditiously”. But increasingly, the Fed is pushing back on the idea that it will go much above neutral. Chair Jay Powell has emphasised the importance of a “soft landing”. The Philadelphia Fed’s Patrick Harker cautions that the Fed should not “ruin the economy” by being “too aggressive” on inflation. San Francisco president Mary Daly said the Fed should hike such that inflation falls to 2 per cent five years from now, implying that she is OK with it staying above the central bank’s target for a half decade! To many bond investors, this is the Fed walking back on its commitment to do “whatever it takes” to get inflation to 2 per cent. And that is unnerving. For example, if core inflation settles at 3 per cent by 2023, but the US economy is growing below its potential, will the Fed keep raising rates? The Fed seems to be saying — no, we won’t. Bond markets have reacted accordingly.Longer-term inflation expectations have risen lately despite equities falling sharply, and the yield curve has steepened. But this has also led to longer bond yields now coming unanchored, rising to the highest level in a decade in some countries. And as bonds have gone into a tailspin, so have the world’s financial markets.

The MOVE fixed income volatility index indicates that the bond market is the most tumultuous it has been since March 2020

For now, it is unlikely that the Fed will make soothing noises to calm investors. After all, tightening financial conditions — even if it is disorderly — is the means by which the Fed slows the economy. But if markets stay queasy in the coming weeks, the Fed may feel compelled to respond. And surprisingly and perhaps counter-intuitively, the correct approach this time — unlike in the past — might be to emphasise its commitment to 2 per cent inflation rather than a soft landing. More

Chinese export growth slowed sharply last month, as the world’s second-biggest economy was battered by draconian coronavirus lockdowns and weakening global demand.Exports increased 3.9 per cent in April from a year earlier — the slowest rate in two years — after growing almost 15 per cent the previous month, official data showed, as supply chains were choked by unpredictable and ambiguous Covid-19 rules and higher inflation sapped consumer spending in Europe and the US.The latest signs of damage to the Chinese economy marked a blow to President Xi Jinping, who has come under pressure as his zero-Covid policy has drawn domestic and international criticism. The hit to the country’s manufacturers has also dimmed hopes that Beijing will be able to achieve its goal of 5.5 per cent annual growth, its lowest target in three decades.Premier Li Keqiang on Saturday warned of the “grave” situation facing employment in the country and vowed to intensify efforts to stabilise job market disruptions, reflecting growing angst in Beijing over the economic outlook.Yet the data was published just days after a top political meeting, chaired by Xi, reaffirmed his zero-Covid approach. The commitment underscored the importance of China’s relentless health and social controls to stamp out the virus, as Beijing prioritises avoiding the potential deaths of tens of millions of unvaccinated Chinese over the immediate economic damage.Authorities in Beijing and elsewhere in China have increased mass testing and intensified localised lockdowns, including in Shanghai. Julian Evans-Pritchard, senior economist at consultancy Capital Economics, said blame for China’s slowing exports rested only “partly” on labour shortages and bottlenecks in the logistics sector caused by the pandemic controls.“The drop in exports seems to mostly reflect softer demand. The sharpest falls were in shipments to the EU and US, where high inflation is weighing on real household incomes,” he said.The export downturn signalled that global demand would slow over the long term, particularly for electronics — an end to a cycle that had helped supercharge China’s recovery from its initial lockdowns in early 2020 at the start of the pandemic. “The declines were also especially pronounced in electronics exports which suggest a further unwinding of pandemic-linked demand for Chinese goods . . . Hopes that exports will rebound once the virus situation improves are likely to be disappointed,” Evans-Pritchard said. The negative sentiment seeped through Asian markets on Monday, with China’s benchmark CSI 300 index declining as much as 1.3 per cent while the renminbi fell 0.7 per cent to hit an 18-month low against the US dollar.Western multinationals, including Apple, Adidas and Estée Lauder as well as luxury groups have warned that the economic slowdown in China and the country’s Covid policies would hit sales. Additional reporting by Maiqi Ding in Beijing More

New York State wants to rebuild the transit hub in Midtown Manhattan and pay for the improvements through a larger real estate development.To restore the ailing Pennsylvania Station, both Gov. Kathy Hochul and her predecessor endorsed an extraordinary reimagining of Midtown Manhattan with 10 super-tall skyscrapers — among the largest real estate projects in American history.The ambitious undertaking would be complex but necessary, they said, as the development of new towers would help pay for much-needed improvements at Penn Station, which was, before the pandemic, the busiest train station in the Western Hemisphere and, perhaps, the most universally disliked.But just as New York State is set to approve the project as soon as next month, a new analysis by New York City’s Independent Budget Office has raised serious questions about the financial viability of the development, the state’s role in it and the possibility that taxpayers would have to foot the bill if the revenue its boosters are expecting fails to materialize.Most strikingly, the report concludes, New York State has provided so few financial details about the 18.3-million-square foot project, that it is all but impossible to analyze the plan on the merits. The state’s cost projections have run the gamut from an original estimate of between $30 billion to $40 billion, to an estimate closer to $20 billion, now that the state is no longer bundling the Hudson Tunnel into the same project estimate, it said.The reconstruction of Penn Station would be complete in 2032, before construction would start on half of the towers, largely consisting of office space, demand for which has declined markedly because of the pandemic-induced shift to working from home. The last building would be finished in 2044.During that 12-year gap, the city agency said, revenue from the new buildings’ office leases, hotel rooms, retail and residences may not be enough to pay for the completed transit improvements, which would force taxpayers to cover the bill.“Without this information, it doesn’t seem reasonable to actually be moving on to approving this program,” George Sweeting, the acting director of the Independent Budget Office, the nonpartisan agency that monitors the city budget, said in an interview.A spokesman at the Empire State Development Corporation, the state agency leading the redevelopment, said that the project would not be brought to its board for approval until the financial questions have been resolved. Agency officials said that the city would be protected from financial risk because any shortfalls would be covered by the state.“In addition to cooperating with the I.B.O. on its report, E.S.D. will continue to work with the community, the city, stakeholders and elected officials to ensure their priorities, including a fair financial structure, are in place prior to securing public approval,” the spokesman, Matthew Gorton, said.“We will finally transform the area’s neglected business district, create much-needed affordable housing and social services, vastly enhance the commuter experience and provide a foundation for sustainable growth for the city and the broader region,” he added.Ms. Hochul revised the proposed development plan, which was first introduced by her predecessor, in response to concerns over the size of the project.Cindy Schultz for The New York TimesDespite the report’s findings, a spokesman for Mayor Eric Adams said that his administration was still committed to the state’s redevelopment plan.“We are working constructively with our state partners to advance a project that transforms Penn Station and the surrounding area into the world-class transit hub New Yorkers deserve, in a fiscally responsible way,” the spokesman, Charles Lutvak, said.The report amplifies many of the criticisms that were first raised by elected officials and community leaders when former Gov. Andrew M. Cuomo revealed the full scope of the project a year ago, just months before he resigned amid sexual-assault allegations.It also echoes similar questions about the project’s finances posed by the New York City Planning Commission in a letter in January to Empire State Development.“The project needs to be retired,” said Layla Law-Gisiko, a community board member in Midtown Manhattan who is running to represent the area in the State Assembly. “The rationale for this project to go forward is to generate the revenue. And this particular project is going to be costing money and not producing revenue.”In many ways, the project mirrored Mr. Cuomo’s other efforts to put his imprint on the city, including the renovation of the Moynihan Train Hall across the street from Penn Station and his reconstruction of the city’s major airports in Queens.In this case, the funds from the development would pay for cosmetic improvements at Penn Station, as well as a potential expansion of the station a block south of its current location. New tracks and platforms would add rail capacity along the economically vital corridor connecting commuters in New Jersey to jobs in New York, after a second tunnel is built under the Hudson River.The state would wield its authority to overrule local zoning and planning laws so that developers could build bigger buildings at the site than otherwise allowed. When Ms. Hochul succeeded Mr. Cuomo, she continued the state’s support for the project while making modest changes to appease critics, such as expanding pedestrian pathways and slightly reducing the project’s proposed scale.The report also highlights a key concern from critics: It would largely benefit a single company, Vornado Realty Trust, one of the city’s largest office developers. Vornado owns four sites in the development zone and part of a fifth, and its chief executive, Steven Roth, last year donated the maximum, $69,700, to Ms. Hochul’s campaign.Mr. Roth, along with his family members, also gave Mr. Cuomo about $400,000 in campaign donations before he resigned. State officials and a Vornado spokesman have said the donations did not influence Vornado’s role in the venture. Mr. Roth has called the redevelopment of the Penn Station area Vornado’s “Promised Land.”In an earnings call this week, Mr. Roth reiterated the company’s commitment to the state’s project. “Obviously, we support it,” he said.A Vornado spokesman declined to comment on the record on the report.Despite the state’s multiyear work on the project and its imminent approval, the Independent Budget Office found that the plan lacked a robust analysis of the numerous risks, including the consequences of the shift to remote work and whether the new Penn Station towers could negatively impact Hudson Yards, the enormous development on the far West Side of Manhattan. Hudson Yards opened in 2019 and has a similarly structured tax deal as the proposed Penn Station site.“It’s a flashing yellow light that the Penn Station redevelopment plan at this stage has more questions than answers,” said Brad Hoylman, the State Senator whose district encompasses most of the proposed development. “There are significant risks that the state has not yet addressed.”Officials have not reviewed whether a simple rezoning of the area to spur redevelopment could produce greater economic benefits and property-tax collections than the state’s project, the agency said. Yet, without the state’s proposal, the area is unlikely to entice developers, the agency said, noting the lack of construction in the Penn Station area. And while the mayor is pro-development, such a rezoning would be unlikely to proceed through the current City Council.The state’s proposed financial scheme would suspend additional property taxes on the new towers but require Vornado and other developers to contribute an undetermined share of their revenues to pay down the construction costs at Penn Station.But without financial specifics, the report said, it is not possible to determine whether the developers would pay less to the city and state in this deal than if the new buildings were subject to standard property taxes. And, while the state would still be collecting payments from developers, the city would lose out on extra property-tax revenue that it would have earned under a standard rezoning.While the Penn Station area has not had seen large redevelopment in decades, Vornado executives have explored such projects in the area for years, which the city agency noted “may signal that little additional incentive is needed, if at all, for those sites.”John Kaehny, the executive director of Reinvent Albany, a government watchdog group, said that the Independent Budget Office’s report makes clear that “the project does not stand up under scrutiny.”“It’s an issue of putting a lot of taxpayers at risk for no reason other than helping Vornado,” Mr. Kaehny said. “It just doesn’t make sense from a public-financing and public-policy perspective.” More

As most of Europe debates what sanctions to impose on Russia, one of its smallest territories, which relies on selling fish to Moscow, is just figuring out where to start. The Faroe Islands, a self-governing part of Denmark that is not in the EU, on Friday approved legislation to allow sanctions against Russia, more than two months after the Ukraine war began. It will be the first time the islands, with a population of only 53,800, have levied sanctions against any country. The law excludes measures that could harm fish exports or fisheries agreements with other countries — reflecting the importance of fishing to the Faroes’ economy. But this is likely to strain relations with the UK, which has imposed sanctions on Russia and which shares some fishing grounds with the islands.

“It’s a sovereign Faroese matter,” said Faroese fisheries minister Árni Skaale. “As a nation, we rely exclusively on fish and relations with neighbouring countries over fisheries. Limiting those opportunities . . . has much greater consequences for us than others realise.”The Faroes have licensed 20 to 29 Russian vessels to fish blue whiting — a white fish typically used for fish food and fish oil — in the “special area” shared with the UK in each quarter of 2022. A 1999 agreement entitles both nations to grant fishing licences in the shared zone and treat it as separate fisheries jurisdictions. The UK government, which does not allow Russian vessels in its waters, has said that not revoking the licences is “simply wrong” and it expects the Faroes to take a tougher stance.

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Fish makes up more than 90 per cent of Faroese exports, with Russia the single largest buyer, purchasing close to a quarter of all exports in 2021. The government said in a statement that its fisheries agreement with Russia “does not allow” restricting the vessels’ access to the Special Area in 2022. According to Skaale, breaching the agreement could trigger retaliation with wider implications for the Faroese economy and the sustainable management of the Faroes and Russia’s joint stock of herring. “There is no simple solution. If we cease all co-operation and communication with Russia [over fisheries], then we completely lose control,” he said. Russia became an increasingly important market for the Faroes after the EU sanctioned the islands in 2013 for unilaterally raising their own fishing quotas. When Russia later blocked food imports from the EU, Norway and other western nations to retaliate against Ukraine-related sanctions in 2014, Faroese fish exports surged.

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“We are more closely aligned with the west now. Previously the EU boycott prevented this. But it doesn’t mean we’ll categorically say yes to everything the EU, Nato and other western countries are doing. In terms of fisheries, we’re most inclined to look to Norway, which is in a very similar position to us,” said the Faroese foreign affairs minister, Jenis av Rana. Norway, which has several joint fish stocks with Russia in the Barents Sea, has banned most Russian vessels from its ports but has not extended the ban to fisheries. Faroese officials will scrutinise the EU’s sanction packages to work out which measures can be adopted by the islands, but the reluctance to touch fisheries raises questions over what impact other sanctions would have.

Av Rana acknowledged on Faroese radio that he was not sure if any of the oligarchs and other individuals on the EU’s list, whose travel has been restricted, “would have intended to visit” the islands.The government’s slow response has attracted criticism from politicians and harvesters’ organisations in neighbouring countries, with one Danish industry organisation describing the Faroese approach as “pirate-like”. At home, the opposition branded it “immoral, unethical and embarrassing”. Av Rana has insisted any criticism of the Faroese approach is unfair, as Faroese companies have largely stopped exporting to Russia voluntarily or have had their hand forced by EU sanctions blocking payments. “The fact that our trade with Russia has ceased — which is so vital for the Faroes, it’s around 25 per cent of our exports — is the equivalent to Denmark suddenly being unable to sell to its top three markets,” he said. More

The greenback made a 22-month high on the growth-sensitive New Zealand dollar in early trade and rose more than 0.5% on the Aussie to a three-month peak as U.S. stockmarket futures slid 1%. [MKTS/GLOB]The benchmark 10-year Treasury yield stood at its highest since 2018 at 3.1464% and at 130.73 yen the dollar is a whisker from a fresh two-decade top.The dollar is close to a five-year high on the euro, which fell 0.2% to $1.0529. Sterling hovered just below two-year lows made last week after the Bank of England warned that Britain’s economy was facing recession.”The dollar will be supported by U.S. economic outperformance and weaker equity prices,” said Joe Capurso, a strategist at the Commonwealth Bank of Australia (OTC:CMWAY) in Sydney.”Despite material increases in interest rates, financial conditions have not tightened much in the major economies…the need to tighten financial conditions and rein in inflation underlies the case for significant further increases.”The U.S. dollar index gained for a fifth week in a row last week and touched an almost 20-year high after the U.S. Federal Reserve hiked its benchmark funds rate 50 basis points and strong jobs data reinforced bets on further big hikes.The index last stood at 103.78. Futures markets are pricing a 75% chance of a 75 bp rate rise at the Fed’s next meeting in June and more than 200 bps of tightening by year’s end.U.S. inflation data due on Wednesday could fuel even more aggressive bets, especially if the pace of headline price rises does not fall to 8.1% as expected.”Risks around U.S. CPI feel binary; a moderation from 8.5%would be mildly comforting, but a lift would doubtless revive expectations for 75 bp Fed hikes, and probably give the dollar a boost,” said analysts at ANZ Bank.”The idea that synchronised global tightening might proceed gently now feels like a forgotten dream as the reality of volatility bites.”Cryptocurrencies have been battered in the rush from risky assets and bitcoin was nursing weekend losses and near its lowest levels of the year at $34,000 while ether, which fell 4% on Sunday, was at $2,525.At the same time, war in Ukraine is disrupting global commodity markets and lockdowns in China are putting the brakes on growth.Joblessness hit its highest since March 2020 in China last month and the yuan was under pressure near an 18-month trough at 6.7319 per dollar in offshore trade.========================================================Currency bid prices at 0041 GMTDescription RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar $1.0526 $1.0548 -0.21% -7.42% +1.0565 +1.0526 Dollar/Yen 130.9050 130.5600 +0.27% +0.00% +130.9500 +130.7300 Euro/Yen 137.77 137.67 +0.07% +0.00% +137.8900 +137.6700 Dollar/Swiss 0.9901 0.9884 +0.15% +8.52% +0.9903 +0.9892 Sterling/Dollar 1.2317 1.2339 -0.15% -8.90% +1.2355 +1.2320 Dollar/Canadian 1.2931 1.2910 +0.17% +0.00% +1.2931 +1.2903 Aussie/Dollar 0.7024 0.7074 -0.71% -3.37% +0.7076 +0.7022 NZ Dollar/Dollar 0.6378 0.6405 -0.42% -6.82% +0.6404 +0.6378 All spotsTokyo spotsEurope spots Volatilities Tokyo Forex market info from BOJ More

SYDNEY (Reuters) – Asian markets got off to a shaky start on Monday as U.S. stock futures took an early skid on rate worries, while a tightening lockdown in Shanghai stoked concerns about global economic growth and possible recession.”A series of rate hikes and hawkish communication came against a backdrop of plummeting Chinese and European activity, new plans for Russian energy bans and continued supply-side pressures,” warned analysts at Barclays (LON:BARC).”This creates the gloomy prospect of persistent inflation forcing central banks to hike rates despite sharply slowing growth.”There was no let up in China’s zero-COVID policy with Shanghai tightening the city-wide COVID lockdown of 25 million residents.Speculation that Russian President Vladimir Putin might declare war on Ukraine in order to call up reserves during his speech at “Victory Day” celebrations also hurt market sentiment. Putin has so far characterised Russia’s actions in Ukraine as a “special military operation”, not a war.S&P 500 stock futures led the way with a drop of 1.0%, while Nasdaq futures shed 0.9%. U.S. 10-year bond yields edged up to a fresh top at 3.15%.MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3%, and Japan’s Nikkei 1.2%.Investors were also tense ahead of the U.S. consumer price report due on Wednesday where only a slight easing in inflation is forecast, and certainly nothing to prevent the Federal Reserve from hiking by at least 50 basis points in June.Core inflation is actually seen rising by 0.4% in April, up from 0.3% the previous month, even as the annual pace dips a bit due to base effects.”In Q1, the annualised monthly change in core CPI was 5.6%,” noted analysts at ANZ. “That is too high for the Fed and we think the FOMC won’t be relaxed about inflation until the core number moderates to around 0.2% m/m on a sustained basis. “The Fed is not the only central bank facing inflation pressures. Increasingly, the guidance from the ECB is becoming a lot more hawkish.”DOLLAR IN DEMANDFed fund futures are priced for rates reaching 1.75-2.0% in July, from the current 0.75-1.0%, and climbing all the way to around 3% by the end of the year.The diary is full of Fed speakers this week, which will give them plenty of opportunity to keep up the hawkish chorus.The aggressive rate outlook saw the U.S. dollar scale 20-year highs on a basket of majors last week at 104.070, and it was last trading firm at 103.820.”Risk appetite is fragile and yield spreads continue to suggest further upside on the Dollar Index,” said Sean Callow, a senior FX strategist at Westpac.”We look for ongoing demand for DXY on dips, with 104 already being probed and still potential for a run towards 107 multi-week.”The euro was stuck at $1.0530 and just a whisker above its recent lows of $1.0481, while the dollar was very much on control against the Japanese yen at 130.88.Oil prices eased back a little on fears about Chinese demand, while the Group of Seven (G7) nations committed on Sunday to ban or phase out imports of Russian oil.Brent was last quoted 63 cents lower at $111.76, while U.S. crude lost 61 cents to $109.16. [O/R]Gold was idling at $1,877 an ounce, having struggled to make any traction as a safe haven recently. [GOL/] More

Inflation is at the highest level in four decades. But how you experience it can vary greatly depending on what you eat, how much you travel and your other spending habits. Answer seven questions to estimate your personal inflation rate.

The numbers above are derived from the Consumer Price Index, the best-known measure of inflation. The C.P.I. is based on a “basket of goods”: The prices of hundreds of commonly purchased goods and services, from cookies to cars to college tuition, are blended together, with each product counted in proportion to its share of overall spending.

Clothing, for example, accounts for about 2.5 percent of the average American’s monthly spending, so clothes prices make up that share of the index. But those are averages — if you spend more than 2.5 percent of your budget on clothes, your personal rate of inflation will look different.

Prices are rising pretty much across the board now, but the increases are particularly rapid in some categories, like meat, cars and travel. People who spend a lot on those categories are experiencing much faster inflation as a result.

The calculator above adjusts your rate of inflation based on how much more or less you spend on different products than the average American. It doesn’t account for other factors, like whether you live in a more expensive part of the country or are more likely to shop around for bargains. Even so, it reveals a wide range of different experiences: Based on how you answered the questions above, you might have a “personal inflation rate” as low as 5 percent or as high as 15 percent.

Even a 5 percent inflation rate is high by the standards of recent history – before the pandemic, prices in the United States were rising about 2 percent a year. But when it comes to inflation, small differences have a big impact. At 5 percent, prices double in about 15 years. At 7 percent, prices double in just over 10 years. And at 15 percent, prices double in only five years.

Oil price boom

Perhaps the clearest case study in how people experience inflation differently is gasoline.

Gas prices have shot up in recent months, partly because Russia’s invasion of Ukraine roiled global energy markets. Prices were up 48 percent in March from a year earlier, accounting for a fifth of the increase in the overall Consumer Price Index. More