U.S. Financial System Is More "Damp Firewood" than "Dry Tinder" Says BNY Mellon's Hoey; "Subcycle Inflation Peak" Expected in Many Countries Later This Year

LONDON and NEW YORK, May 16, 2011 /PRNewswire/ -- "We believe that the U.S. currently has more of a 'damp firewood' financial system than a 'dry tinder' financial system, which implies only gradual strengthening of credit-financed spending," says BNY Mellon Chief Economist Richard B. Hoey in his May 2011 Economic Update.  

"While global inflation pressures are rising, this is occurring after a period of disinflation and we expect a 'subcycle inflation peak' later this year in many countries," Hoey continued.  Important subcycle fluctuations Hoey expects include:

• A  V-shaped pattern in the Japanese economy;
• A drop and then a rebound in auto production;
• A moderate subcycle cooling in the industrial sector in the next few months, and
• An inflation surge with many countries likely to reach a "subcycle inflation peak" later this year.

Hoey expects cyclical expansion to be sustainable even as many economies experience a short subcycle slowdown in the industrial sector following the recent phase of an unsustainably rapid surge in industrial production at a time of higher energy prices and some policy tightening.  

See http://www.bnymellon.com/foresight/pdf/update.pdf for Hoey's complete May 2011 Economic Update.

Notes to Editors:

BNY Mellon Asset Management is the umbrella organization for BNY Mellon's affiliated investment management firms and global distribution companies.

BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $25.5 trillion in assets under custody and administration and $1.2 trillion in assets under management, services $11.9 trillion in outstanding debt and processes global payments averaging $1.7 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available at www.bnymellon.com.

All information source BNY Mellon Asset Management as at 31/03/11. This press release is qualified for issuance in the UK and US and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorised. The statements and opinions expressed herein are those of the author and are subject to change as economic and market conditions dictate, and do not necessarily represent the views of BNY Mellon, BNY Mellon Asset Management, The Dreyfus Corporation or any of their respective affiliates. This press release is issued by BNY Mellon Asset Management (US) and BNY Mellon Asset Management International Limited (ex-US) to members of the financial press and media and the information contained herein should not be construed as investment advice. Past performance is not a guide to future performance. Registered office of BNY Mellon Asset Management International: BNY Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England no. 1118580. Authorised and regulated by the Financial Services Authority. A BNY Mellon Company(SM).

SOURCE BNY Mellon

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