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Mapping the World’s Youngest and Oldest Countries
Mapping the World’s Youngest and Oldest Countries
Country age demographics are determined by two key factors: fertility and mortality.
Throughout history, it was typical to see both birth and death rates at higher levels. But today, in most parts of the world, women are having fewer children, and innovations in healthcare and technology mean we are all living longer. The average person today lives to 72.6 years old, while the rate of births per woman has fallen to 2.5.
These trends have drastically altered the demographics of mature economies, resulting in a much older population. In many developing countries, however, births still outweigh deaths, resulting in populations that skew younger.
This visualization uses data from the World Bank to examine the countries with the highest shares of old and young people.
The Fountain of Youth
By 2030, the United Nations estimates there will be 1.3 billion people on the planet between the ages of 15-24. Proving to be a fountain of youth globally, the continent of Africa boasts the top 10 countries with the largest shares of young people in the world.
Somalia, Zambia, and the DRC are just a few to crack the top 10 list. The youngest country in the world is Niger, where almost 50% of the population is below the age of 15.
Here’s a full list of global countries, sorted by percentage of population under 15 years old:
Country | Share of Population Younger Than 15 (% of total, 2019) |
---|---|
🇳🇪 Niger | 49.8% |
🇲🇱 Mali | 47.3% |
🇹🇩 Chad | 46.8% |
🇦🇴 Angola | 46.6% |
🇺🇬 Uganda | 46.5% |
🇸🇴 Somalia | 46.4% |
🇨🇩 Congo, Dem. Rep. | 46.0% |
🇧🇮 Burundi | 45.4% |
🇧🇫 Burkina Faso | 44.7% |
🇿🇲 Zambia | 44.5% |
🇲🇿 Mozambique | 44.4% |
🇬🇲 The Gambia | 44.1% |
🇹🇿 Tanzania | 43.8% |
🇳🇬 Nigeria | 43.7% |
🇲🇼 Malawi | 43.5% |
🇬🇳 Guinea | 43.4% |
🇸🇳 Senegal | 42.8% |
🇦🇫 Afghanistan | 42.5% |
🇨🇲 Cameroon | 42.4% |
🇧🇯 Benin | 42.2% |
🇬🇼 Guinea-Bissau | 42.2% |
🇿🇼 Zimbabwe | 42.2% |
🇸🇹 Sao Tome and Principe | 42.1% |
🇨🇮 Cote d'Ivoire | 41.7% |
🇸🇸 South Sudan | 41.6% |
🇨🇬 Congo | 41.5% |
🇹🇬 Togo | 41.0% |
🇱🇷 Liberia | 40.8% |
🇸🇱 Sierra Leone | 40.7% |
🇲🇬 Madagascar | 40.4% |
🇪🇹 Ethiopia | 40.3% |
🇸🇩 Sudan | 40.2% |
🇸🇧 Solomon Islands | 40.1% |
🇲🇷 Mauritania | 39.9% |
🇷🇼 Rwanda | 39.8% |
🇰🇲 Comoros | 39.3% |
🇰🇪 Kenya | 39.2% |
🇾🇪 Yemen | 39.2% |
🇻🇺 Vanuatu | 38.7% |
🇮🇶 Iraq | 38.0% |
🇼🇸 Samoa | 37.9% |
🇸🇿 Eswatini | 37.8% |
🇬🇭 Ghana | 37.4% |
🇹🇱 Timor-Leste | 37.3% |
🇬🇦 Gabon | 37.2% |
🇹🇯 Tajikistan | 37.1% |
🇬🇶 Equatorial Guinea | 37.0% |
🇳🇦 Namibia | 36.9% |
🇰🇮 Kiribati | 35.8% |
🇵🇬 Papua New Guinea | 35.5% |
🇵🇰 Pakistan | 35.1% |
🇹🇴Tonga | 35.1% |
🇬🇹 Guatemala | 33.9% |
🇧🇼 Botswana | 33.8% |
🇪🇬 Egypt | 33.8% |
🇯🇴 Jordan | 33.6% |
🇭🇹 Haiti | 32.9% |
🇰🇬 Kyrgyzstan | 32.5% |
🇱🇸 Lesotho | 32.5% |
🇱🇦 Laos | 32.3% |
🇫🇲 Micronesia | 31.5% |
🇭🇳 Honduras | 31.2% |
🇰🇭 Cambodia | 31.1% |
🇸🇾 Syria | 31.1% |
🇲🇳 Mongolia | 30.8% |
🇹🇲 Turkmenistan | 30.8% |
🇧🇴 Bolivia | 30.6% |
🇩🇿 Algeria | 30.6% |
🇵🇭 Philippines | 30.5% |
🇳🇮 Nicaragua | 29.9% |
🇧🇿 Belize | 29.7% |
🇳🇵 Nepal | 29.6% |
🇫🇯 Fiji | 29.3% |
🇩🇯 Djibouti | 29.2% |
🇵🇾 Paraguay | 29.2% |
🇿🇦 South Africa | 29.0% |
🇰🇿 Kazakhstan | 28.9% |
🇺🇿 Uzbekistan | 28.8% |
🇨🇻 Cape Verde | 28.4% |
🇱🇾 Libya | 28.1% |
🇬🇾 Guyana | 27.9% |
🇮🇱 Israel | 27.9% |
🇩🇴 Dominican Republic | 27.7% |
🇪🇨 Ecuador | 27.7% |
🇻🇪 Venezuela | 27.4% |
🇧🇩 Bangladesh | 27.2% |
🇲🇦 Morocco | 27.0% |
🇸🇻 El Salvador | 26.9% |
🇸🇷 Suriname | 26.9% |
🇵🇦 Panama | 26.8% |
🇮🇳 India | 26.6% |
🇮🇩 Indonesia | 26.2% |
🇲🇽 Mexico | 26.2% |
🇲🇲 Myanmar | 25.9% |
🇱🇧 Lebanon | 25.6% |
🇧🇹 Bhutan | 25.3% |
🇵🇪 Peru | 25.3% |
🇸🇦 Saudi Arabia | 24.9% |
🇮🇷 Iran | 24.7% |
🇦🇷 Argentina | 24.6% |
🇹🇷 Turkey | 24.3% |
🇹🇳 Tunisia | 24.2% |
🇬🇺 Guam | 24.1% |
🇱🇰 Sri Lanka | 24.0% |
🇬🇩 Grenada | 23.7% |
🇲🇾 Malaysia | 23.7% |
🇸🇨 Seychelles | 23.7% |
🇯🇲 Jamaica | 23.5% |
🇦🇿Azerbaijan | 23.4% |
🇻🇳 Vietnam | 23.2% |
🇧🇳 Brunei | 22.6% |
🇨🇴 Colombia | 22.6% |
🇵🇫 French Polynesia | 22.6% |
🇳🇨 New Caledonia | 22.4% |
🇴🇲 Oman | 22.4% |
🇻🇨 St. Vincent and the Grenadines | 22.2% |
🇧🇸 Bahamas | 22.1% |
🇦🇬 Antigua and Barbuda | 22.0% |
🇰🇼 Kuwait | 21.6% |
🇮🇪 Ireland | 21.2% |
🇨🇷 Costa Rica | 21.1% |
🇧🇷 Brazil | 21.0% |
🇦🇲 Armenia | 20.8% |
🇺🇾 Uruguay | 20.5% |
🇹🇹 Trinidad and Tobago | 20.3% |
🇬🇪 Georgia | 20.0% |
🇰🇵 North Korea | 20.0% |
🇲🇻 Maldives | 19.9% |
🇮🇸 Iceland | 19.6% |
🇳🇿 New Zealand | 19.6% |
🇨🇱 Chile | 19.5% |
🇻🇮 U.S. Virgin Islands | 19.5% |
🇦🇺 Australia | 19.3% |
🇧🇭 Bahrain | 18.7% |
🇨🇼 Curacao | 18.5% |
🇺🇸 United States | 18.5% |
🇱🇨 St. Lucia | 18.2% |
🇲🇪 Montenegro | 18.2% |
🇷🇺 Russia | 18.2% |
🇨🇳 China | 17.8% |
🇫🇷 France | 17.8% |
🇬🇧 United Kingdom | 17.7% |
🇦🇼 Aruba | 17.6% |
🇸🇪 Sweden | 17.6% |
🇦🇱 Albania | 17.4% |
🇳🇴 Norway | 17.4% |
🇲🇺 Mauritius | 17.3% |
🇧🇪 Belgium | 17.1% |
🇧🇧 Barbados | 17.1% |
🇧🇾 Belarus | 17.0% |
🇹🇭 Thailand | 16.8% |
🇨🇾 Cyprus | 16.7% |
🇪🇪 Estonia | 16.5% |
🇩🇰 Denmark | 16.4% |
🇲🇰 North Macedonia | 16.4% |
🇱🇻 Latvia | 16.3% |
🇵🇷 Puerto Rico | 16.3% |
🇨🇺 Cuba | 16.0% |
🇫🇮 Finland | 16.0% |
🇲🇩 Moldova | 15.9% |
🇳🇱 Netherlands | 15.9% |
🇺🇦 Ukraine | 15.9% |
🇨🇦 Canada | 15.8% |
🇨🇿 Czech Republic | 15.7% |
🇱🇺 Luxembourg | 15.7% |
🇷🇴 Romania | 15.6% |
🇷🇸 Serbia | 15.5% |
🇸🇰 Slovakia | 15.5% |
🇵🇱 Poland | 15.2% |
Channel Islands | 15.1% |
🇱🇹 Lithuania | 15.1% |
🇸🇮 Slovenia | 15.1% |
🇨🇭 Switzerland | 14.9% |
🇦🇪 United Arab Emirates | 14.7% |
🇧🇬 Bulgaria | 14.7% |
🇧🇦 Bosnia and Herzegovina | 14.7% |
🇪🇸 Spain | 14.6% |
🇭🇷 Croatia | 14.6% |
🇦🇹 Austria | 14.4% |
🇭🇺 Hungary | 14.4% |
🇲🇹 Malta | 14.3% |
🇲🇴 Macao SAR, China | 14.0% |
🇬🇷 Greece | 13.9% |
🇩🇪 Germany | 13.8% |
🇶🇦 Qatar | 13.6% |
🇵🇹 Portugal | 13.3% |
🇮🇹 Italy | 13.2% |
🇰🇷 South Korea | 12.7% |
🇯🇵 Japan | 12.6% |
🇭🇰 Hong Kong SAR, China | 12.3% |
🇸🇬 Singapore | 12.3% |
Young countries have significant opportunities ahead of them. A younger population means a larger upcoming workforce and more opportunities for innovation and economic growth.
While domestic markets in Africa grow in terms of labor supply, innovation, and potential consumers, there are also challenges that arise in these countries. Corruption, political instability and unemployment, particularly in Africa, are all potential barriers to prosperity for the continent’s Gen Z population.
Populations Skewing Older
The world’s oldest country is Japan, where 28% of the population is older than 65. However, it’s an anomaly—the rest of the oldest countries in the top 10 are all in Europe.
Globally, it’s the 65+ age group that is growing the fastest. According to the same UN estimates, it is predicted that by 2050 that one in six people will be over 65 years old.
Here’s a full list of global countries, sorted by percentage of population over 65 years old:
Country | Share of Population Older Than 65 (% of total, 2019) |
---|---|
🇯🇵 Japan | 28.0% |
🇮🇹 Italy | 23.0% |
🇵🇹 Portugal | 22.4% |
🇫🇮 Finland | 22.1% |
🇬🇷 Greece | 21.9% |
🇩🇪 Germany | 21.5% |
🇧🇬 Bulgaria | 21.2% |
🇭🇷 Croatia | 20.8% |
🇲🇹 Malta | 20.8% |
🇫🇷 France | 20.3% |
🇱🇻 Latvia | 20.3% |
🇸🇪 Sweden | 20.1% |
🇸🇮 Slovenia | 20.1% |
🇱🇹 Lithuania | 20.1% |
🇪🇪 Estonia | 19.9% |
🇩🇰 Denmark | 19.9% |
🇻🇮 U.S. Virgin Islands | 19.8% |
🇨🇿 Czech Republic | 19.8% |
🇵🇷 Puerto Rico | 19.6% |
🇭🇺 Hungary | 19.6% |
🇪🇸 Spain | 19.6% |
🇳🇱 Netherlands | 19.6% |
🇦🇹 Austria | 19.0% |
🇧🇪 Belgium | 19.0% |
🇨🇭 Switzerland | 18.8% |
🇷🇴 Romania | 18.7% |
🇷🇸 Serbia | 18.7% |
🇬🇧 United Kingdom | 18.5% |
🇵🇱 Poland | 18.1% |
🇨🇦 Canada | 17.6% |
Channel Islands | 17.6% |
🇭🇰 Hong Kong SAR, China | 17.4% |
🇳🇴 Norway | 17.2% |
🇧🇦 Bosnia and Herzegovina | 17.2% |
🇨🇼 Curaçao | 17.1% |
🇺🇦 Ukraine | 16.7% |
🇧🇧 Barbados | 16.2% |
🇺🇸 United States | 16.2% |
🇸🇰 Slovakia | 16.1% |
🇳🇿 New Zealand | 15.9% |
🇦🇺 Australia | 15.9% |
🇨🇺 Cuba | 15.5% |
🇲🇪 Montenegro | 15.3% |
🇧🇾 Belarus | 15.2% |
🇮🇸 Iceland | 15.1% |
🇷🇺 Russia | 15.0% |
🇬🇪 Georgia | 15.0% |
🇰🇷 South Korea | 15.0% |
🇺🇾 Uruguay | 14.9% |
🇱🇺 Luxembourg | 14.2% |
🇮🇪 Ireland | 14.2% |
🇦🇱 Albania | 14.2% |
🇲🇰 North Macedonia | 14.0% |
🇦🇼 Aruba | 14.0% |
🇨🇾 Cyprus | 14.0% |
🇹🇭 Thailand | 12.4% |
🇸🇬 Singapore | 12.3% |
🇮🇱 Israel | 12.2% |
🇲🇩 Moldova | 12.0% |
🇲🇺 Mauritius | 11.9% |
🇨🇱 Chile | 11.8% |
🇦🇲 Armenia | 11.4% |
🇨🇳 China | 11.4% |
🇦🇷 Argentina | 11.2% |
🇲🇴 Macao SAR, China | 11.2% |
🇹🇹 Trinidad and Tobago | 11.1% |
🇱🇰 Sri Lanka | 10.8% |
🇬🇺 Guam | 10.1% |
🇱🇨 St. Lucia | 10.0% |
🇨🇷 Costa Rica | 9.8% |
🇻🇨 St. Vincent and the Grenadines | 9.7% |
🇬🇩 Grenada | 9.6% |
🇳🇨 New Caledonia | 9.4% |
🇰🇵 North Korea | 9.2% |
🇧🇷 Brazil | 9.2% |
🇦🇬 Antigua and Barbuda | 9.0% |
🇯🇲 Jamaica | 8.9% |
🇨🇴 Colombia | 8.7% |
🇹🇷 Turkey | 8.7% |
🇵🇫 French Polynesia | 8.6% |
🇹🇳 Tunisia | 8.5% |
🇸🇻 El Salvador | 8.4% |
🇵🇪 Peru | 8.3% |
🇵🇦 Panama | 8.3% |
🇸🇨 Seychelles | 7.8% |
🇰🇿 Kazakhstan | 7.6% |
🇻🇪 Venezuela | 7.6% |
🇻🇳 Vietnam | 7.5% |
🇧🇸 Bahamas | 7.4% |
🇲🇽 Mexico | 7.4% |
🇪🇨 Ecuador | 7.3% |
🇧🇴 Bolivia | 7.3% |
🇲🇦 Morocco | 7.3% |
🇩🇴 Dominican Republic | 7.2% |
🇱🇧 Lebanon | 7.2% |
🇸🇷 Suriname | 7.0% |
🇲🇾 Malaysia | 6.9% |
🇬🇾 Guyana | 6.7% |
🇵🇾 Paraguay | 6.6% |
🇩🇿 Algeria | 6.5% |
🇦🇿 Azerbaijan | 6.4% |
🇮🇳 India | 6.3% |
🇮🇷 Iran | 6.3% |
🇧🇹 Bhutan | 6.0% |
🇮🇩 Indonesia | 6.0% |
🇲🇲 Myanmar | 6.0% |
🇹🇴 Tonga | 5.9% |
🇳🇵 Nepal | 5.7% |
🇫🇯 Fiji | 5.6% |
🇳🇮 Nicaragua | 5.4% |
🇿🇦 South Africa | 5.4% |
🇵🇭 Philippines | 5.3% |
🇪🇬 Egypt | 5.2% |
🇧🇳 Brunei | 5.2% |
🇧🇩 Bangladesh | 5.1% |
🇭🇹 Haiti | 5.0% |
🇼🇸 Samoa | 4.9% |
🇬🇹 Guatemala | 4.9% |
🇱🇸 Lesotho | 4.9% |
🇧🇿 Belize | 4.8% |
🇭🇳 Honduras | 4.8% |
🇰🇭 Cambodia | 4.7% |
🇨🇻 Cape Verde | 4.6% |
🇸🇾 Syria | 4.6% |
🇩🇯 Djibouti | 4.6% |
🇰🇬 Kyrgyzstan | 4.6% |
🇺🇿 Uzbekistan | 4.5% |
🇹🇲 Turkmenistan | 4.5% |
🇱🇾 Libya | 4.4% |
🇧🇼 Botswana | 4.3% |
🇵🇰 Pakistan | 4.3% |
🇹🇱 Timor-Leste | 4.2% |
🇫🇲 Micronesia | 4.1% |
🇲🇳 Mongolia | 4.1% |
🇱🇦 Laos | 4.1% |
🇰🇮 Kiribati | 4.0% |
🇸🇿 Eswatini | 4.0% |
🇯🇴 Jordan | 3.8% |
🇲🇻 Maldives | 3.6% |
🇸🇧 Solomon Islands | 3.6% |
🇸🇩 Sudan | 3.6% |
🇻🇺 Vanuatu | 3.6% |
🇳🇦 Namibia | 3.6% |
🇬🇦 Gabon | 3.5% |
🇪🇹 Ethiopia | 3.5% |
🇵🇬 Papua New Guinea | 3.5% |
🇸🇦 Saudi Arabia | 3.4% |
🇮🇶 Iraq | 3.3% |
🇸🇸 South Sudan | 3.3% |
🇱🇷 Liberia | 3.2% |
🇧🇯 Benin | 3.2% |
🇲🇷 Mauritania | 3.1% |
🇸🇳 Senegal | 3.0% |
🇬🇭 Ghana | 3.0% |
🇹🇯 Tajikistan | 3.0% |
🇰🇲 Comoros | 3.0% |
🇲🇬 Madagascar | 3.0% |
🇷🇼 Rwanda | 3.0% |
🇨🇩 Democratic Republic of the Congo | 3.0% |
🇿🇼 Zimbabwe | 2.9% |
🇸🇹 Sao Tome and Principe | 2.9% |
🇸🇱 Sierra Leone | 2.9% |
🇬🇳 Guinea | 2.9% |
🇾🇪 Yemen | 2.9% |
🇸🇴 Somalia | 2.8% |
🇹🇬 Togo | 2.8% |
🇲🇿 Mozambique | 2.8% |
🇨🇮 Cote d'Ivoire | 2.8% |
🇬🇼 Guinea-Bissau | 2.8% |
🇨🇫 Central African Republic | 2.8% |
🇰🇼 Kuwait | 2.7% |
🇳🇬 Nigeria | 2.7% |
🇨🇲 Cameroon | 2.7% |
🇨🇬 Congo | 2.7% |
🇲🇼 Malawi | 2.6% |
🇹🇿 Tanzania | 2.6% |
🇦🇫 Afghanistan | 2.6% |
🇳🇪 Niger | 2.5% |
🇬🇲 The Gambia | 2.5% |
🇧🇭 Bahrain | 2.5% |
🇲🇱 Mali | 2.4% |
🇹🇩 Chad | 2.4% |
🇴🇲 Oman | 2.4% |
🇬🇶 Equatorial Guinea | 2.4% |
🇰🇪 Kenya | 2.4% |
🇧🇫 Burkina Faso | 2.4% |
🇧🇮 Burundi | 2.3% |
🇦🇴 Angola | 2.1% |
🇿🇲 Zambia | 2.1% |
🇺🇬 Uganda | 1.9% |
🇶🇦 Qatar | 1.5% |
🇦🇪 United Arab Emirates | 1.1% |
Fewer births, and a resulting older population, is a trend attributed to the changing lifestyles of women. For example, Japan’s fertility rate has fallen to less than 1.5 children per woman due to modern access to contraceptives and the prioritization of work over marriage and family life.
However, fewer young people also means a smaller workforce on the horizon and a shrinking domestic market. There is also a rising social cost of caring for the elderly, as longer lifespans have resulted in a higher prevalence of chronic diseases and an increasing inability to care for oneself. This can result in an increased tax burden on the diminishing younger, working population.
Another Perspective on the Data
Looking at the data from the opposite angle also reveals information about our world. Here’s a look at the countries with the lowest proportions of younger or older people.
Hong Kong and Singapore have some of the lowest fertility rates in the world (1.1), so it’s no surprise to see low numbers of children in their demographic data.
In a country like the United Arab Emirates, the majority of the population is made up of foreign workers, so the number of people in the 65+ age group is extremely low. In the coming decades though, the situation is expected to shift dramatically with one in every five Emiratis residing that age group by 2050.
The Big Picture
While each country has its own unique demographic make up, one thing is clear. As education and wealth levels rise around the world, fertility rates are dropping almost everywhere.
The trend of long life expectancies and fewer births is likely to continue, but young outliers will remain and they present immense economic potential.
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Markets
Interest Rate Hikes vs. Inflation Rate, by Country
Inflation rates are reaching multi-decade highs in some countries. How aggressive have central banks been with interest rate hikes?

Interest Rate Hikes vs. Inflation Rate, by Country
Imagine today’s high inflation like a car speeding down a hill. In order to slow it down, you need to hit the brakes. In this case, the “brakes” are interest rate hikes intended to slow spending. However, some central banks are hitting the brakes faster than others.
This graphic uses data from central banks and government websites to show how policy interest rates and inflation rates have changed since the start of the year. It was inspired by a chart created by Macrobond.
How Do Interest Rate Hikes Combat Inflation?
To understand how interest rates influence inflation, we need to understand how inflation works. Inflation is the result of too much money chasing too few goods. Over the last several months, this has occurred amid a surge in demand and supply chain disruptions worsened by Russia’s invasion of Ukraine.
In an effort to combat inflation, central banks will raise their policy rate. This is the rate they charge commercial banks for loans or pay commercial banks for deposits. Commercial banks pass on a portion of these higher rates to their customers, which reduces the purchasing power of businesses and consumers. For example, it becomes more expensive to borrow money for a house or car.
Ultimately, interest rate hikes act to slow spending and encourage saving. This motivates companies to increase prices at a slower rate, or lower prices, to stimulate demand.
Rising Interest Rates and Inflation
With inflation rates hitting multi-decade highs in some countries, many central banks have announced interest rate hikes. Below, we show how the inflation rate and policy interest rate have changed for select countries and regions since January 2022. The jurisdictions are ordered from highest to lowest current inflation rate.
Jurisdiction | Jan 2022 Inflation | May 2022 Inflation | Jan 2022 Policy Rate | Jun 2022 Policy Rate |
---|---|---|---|---|
UK | 5.50% | 9.10% | 0.25% | 1.25% |
U.S. | 7.50% | 8.60% | 0.00%-0.25% | 1.50%-1.75% |
Euro Area | 5.10% | 8.10% | 0.00% | 0.00% |
Canada | 5.10% | 7.70% | 0.25% | 1.50% |
Sweden | 3.90% | 7.20% | 0.00% | 0.25% |
New Zealand | 5.90% | 6.90% | 0.75% | 2.00% |
Norway | 3.20% | 5.70% | 0.50% | 1.25% |
Australia | 3.50% | 5.10% | 0.10% | 0.85% |
Switzerland | 1.60% | 2.90% | -0.75% | -0.25% |
Japan | 0.50% | 2.50% | -0.10% | -0.10% |
The Euro area has 3 policy rates; the data above represents the main refinancing operations rate. Inflation data is as of May 2022 except for New Zealand and Australia, where the latest quarterly data is as of March 2022.
The U.S. Federal Reserve has been the most aggressive with its interest rate hikes. It has raised its policy rate by 1.5% since January, with half of that increase occurring at the June 2022 meeting. Jerome Powell, the Federal Reserve chair, said the committee would like to “do a little more front-end loading” to bring policy rates to normal levels. The action comes as the U.S. faces its highest inflation rate in 40 years.
On the other hand, the European Union is experiencing inflation of 8.1% but has not yet raised its policy rate. The European Central Bank has, however, provided clear forward guidance. It intends to raise rates by 0.25% in July, by a possibly larger increment in September, and with gradual but sustained increases thereafter. Clear forward guidance is intended to help people make spending and investment decisions, and avoid surprises that could disrupt markets.
Pacing Interest Rate Hikes
Raising interest rates is a fine balancing act. If central banks raise rates too quickly, it’s like slamming the brakes on that car speeding downhill: the economy could come to a standstill. This occurred in the U.S. in the 1980’s when the Federal Reserve, led by Chair Paul Volcker, raised the policy rate to 20%. The economy went into a recession, though the aggressive monetary policy did eventually tame double digit inflation.
However, if rates are raised too slowly, inflation could gather enough momentum that it becomes difficult to stop. The longer high price increases linger, the more future inflation expectations build. This can result in people buying more in anticipation of prices rising further, perpetuating high demand.
“There’s always a risk of going too far or not going far enough, and it’s going to be a very difficult judgment to make.” — Jerome Powell, U.S. Federal Reserve Chair
It’s worth noting that while central banks can influence demand through policy rates, this is only one side of the equation. Inflation is also being caused by supply chain issues, a problem that is more or less outside of the control of central banks.
Markets
3 Insights From the FED’s Latest Economic Snapshot
Stay up to date on the U.S. economy with this infographic summarizing the most recent Federal Reserve data released.

3 Insights From the Latest U.S. Economic Data
Each month, the Federal Reserve Bank of New York publishes monthly economic snapshots.
To make this report accessible to a wider audience, we’ve identified the three most important takeaways from the report and compiled them into one infographic.
1. Growth figures in Q2 will make or break a recession
Generally speaking, a recession begins when an economy exhibits two consecutive quarters of negative GDP growth. Because U.S. GDP shrank by -1.5% in Q1 2022 (January to March), a lot rests on the Q2 figure (April to June) which should be released on July 28th.
Referencing strong business activity and continued growth in consumer spending, economists predict that U.S. GDP will grow by +2.1% in Q2. This would mark a decisive reversal from Q1, and put an end to recessionary fears for the time being.
Unfortunately, inflation is the top financial concern for Americans, and this is dampening consumer confidence. Shown below, the consumer confidence index reflects the public’s short-term outlook for income, business, and labor conditions.
Falling consumer confidence suggests that more people will delay big purchases such as cars, major appliances, and vacations.
2. The COVID-era housing boom could be over
Housing markets have been riding high since the beginning of the COVID-19 pandemic, but this run is likely coming to an end. Here’s a summary of what’s happened since 2020:
- Lockdowns in early 2020 created lots of pent-up demand for homes
- Greater household savings and record-low mortgage rates pushed demand even further
- Supply chain disruptions greatly increased the cost of materials like lumber
- Construction of new homes couldn’t keep up, and housing supply fell to historic lows
Today, home prices are at record highs and the cost of borrowing is rapidly rising. For evidence, look no further than the 30-year fixed mortgage rate, which has doubled to more than 6% since the beginning of 2022.
Given these developments, the drop in the number of home sales could be a sign that many Americans are being priced out of the market.
3. Don’t expect groceries to become any cheaper
Inflation has been a hot topic this year, especially with gas prices reaching $5 a gallon. But there’s one category of goods that’s perhaps even more alarming: food.
The following table includes food inflation over the past three years, as the percent change over the past 12 months.
Date | CPI Food Component (%) |
---|---|
2018-02-01 | 1.4% |
2019-05-01 | 2.0% |
2019-06-01 | 1.9% |
2019-07-01 | 1.8% |
2019-08-01 | 1.7% |
2019-09-01 | 1.8% |
2019-10-01 | 2.1% |
2019-11-01 | 2.0% |
2019-12-01 | 1.8% |
2020-01-01 | 1.8% |
2020-02-01 | 1.8% |
2020-03-01 | 1.9% |
2020-04-01 | 3.5% |
2020-05-01 | 4.0% |
2020-06-01 | 4.5% |
2020-07-01 | 4.1% |
2020-08-01 | 4.1% |
2020-09-01 | 4.0% |
2020-10-01 | 3.9% |
2020-11-01 | 3.7% |
2020-12-01 | 3.9% |
2021-01-01 | 3.8% |
2021-02-01 | 3.6% |
2021-03-01 | 3.5% |
2021-04-01 | 2.4% |
2021-05-01 | 2.1% |
2021-06-01 | 2.4% |
2021-07-01 | 3.4% |
2021-08-01 | 3.7% |
2021-09-01 | 4.6% |
2021-10-01 | 5.3% |
2021-11-01 | 6.1% |
2021-12-01 | 6.3% |
2022-01-01 | 7.0% |
2022-02-01 | 7.9% |
2022-03-01 | 8.8% |
2022-04-01 | 9.4% |
2022-05-01 | 10.1% |
From this data, we can see that food inflation really picked up speed in April 2020, jumping to +3.5% from +1.9% in the previous month. This was due to supply chain disruptions and a sudden rebound in global demand.
Fast forward to today, and food inflation is running rampant at 10.1%. A contributing factor is the impending fertilizer shortage, which stems from the Ukraine war. As it turns out, Russia is not only a massive exporter of oil, but wheat and fertilizer as well.
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