Jerome Powell is bound to have a crash landing in the Federal Reserve. From the very beginning of his mandate, pressure is mounting on him to raise rates. An unpalatable choice for someone who hoped to follow Janet Yellen’s wait-and-see stance for as long as he could.
Articles by JP Marin Arrese
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The Spanish Parliament has set up a special Committee to scrutinise what led to the financial crisis ten years ago. But the craving for finding individual culprits will overrun any reasonable attempt to search for the simple truth that no one could foresee the crisis.
The trend in inflation is confusing those in charge of monetary policy. After a significant uptick in the last part of 2017, it has really stagnated, in stark contrast with the growing dynamism of the economy.
Ever since the nationalists in Catalonia flared a low key rebellion against Madrid, the region seems close to the world depicted by Aldous Huxley. They are attempting to create a brand new life, erasing all Spanish vestiges from early childhood onwards.
In her last press conference as Fed Chair, Janet Yellen showed no visible signs of emotion or resentfulness, taking her wholly unjustified dismissal with notable fortitude and good spirits. For all her weaknesses, both observers and markets will miss her unbiased attitude, conscientious dedication and economic mastery.
Since the segregation process in Catalonia began, one got the feeling that it would be a serious risk to our country’s economic stability. Spain would pay a high price for the loss of its main economic region, which accounts for about 20% of GDP.
Investors and observers have hailed the Fed’s decision to trim its balance sheet from October onwards as a turning point in the drive to normalise monetary policy. But a decline of $10 billion per month in the hefty portfolio the Fed has accumulated in recent years will hardly have any visible effect on the bond market.
The ECB governing board will meet today amidst a climate that doesn’t invite a move of any kind. It goes without saying that the only open option is whether or not to launch a discussion on how to undertake the tapering of its asset buying programme.
Donald Trump has launched a nation-wide campaign in an attempt to salvage his tax reform plans. And time is running out for Congress. After deciding to totally amend the bill, it is proving to be incapable of reaching a minimum consensus on its shape and content.
In Jackson Hole, the FED and ECB Chairs have voiced concern about US plans to unravel the Dodd-Frank financial regulation act, thus undermining overall stability.