WASHINGTON | By Pablo Pardo | Would the true IMF prediction please stand up? The Fund has just predicted a growth of 0.9 percent GDP for Spain in 2014. Three months ago, it was 0.6 percent. Seven months ago, it was 0.2 percent.
SAO PAULO | By Marcus Nunes| The St Louis Fed Regional Economist has an interesting article: The Ups and Downs of Inflation and the Role of Fed Credibility. Although they likely don´t realize it, it reads like “last rites” to the present system.
LONDON | By Michael Gapen at Barclays | Persistent improvement in US labor markets has caused the Fed to continue tapering and to alter its quantitative policy rate guidance in favor of qualitative language indicating that the committee is prepared to maintain the current target rate for the federal funds rate for “a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal.”
SAO PAULO | By Marcus Nunes via Historinhas | The Fed’s (and central banks in general) preferred tactic is “wait-and-see”, usually expressed in the form of “we will monitor closely”! Instead of becoming a focal point for the coordination of expectations, inflation has become a barrier to getting the economy’s recovery back on track.
NEW YORK | By Richard Kirsch via next New Deal | If we are to give American workers the ability to bargain for a fair share of the wealth they create, we need strengthen labor law and bring in 34 millions workers (one-in-four) who are now excluded from the National Labor Relations Act. These include domestic workers, farmworkers, front-line workers with minimum supervisory responsibilities, and public employees.
SAO PAULO | By Marcus Nunes | For the last four years many have touted increasing the inflation target to 4% as the best way to “cure” our ills. If I well recall, it started with the IMF, at least by its Chief-Economist Olivier Blanchard, who in an IMF publication wrote “Rethinking Macroeconomic Policy.”
SAO PAULO | By Marcus Nunes via Historinhas | “The IMF has been very generous in its suggestions on what we should do,” said Mr Draghi in a sarcastic tone on Thursday.
MADRID | By Luis Arroyo | In the last two years, the FED did not meet the inflation target (the same as the ECB, although the latter has a commitment of 2% tops), which has grown at a slower pace than announced –as we can see in the chart above (by Ryan Avent at The Economist).
SAO PAULO | By Marcus Nunes | There is a significant difference between the discourse formulated by Ms. Yellen and the one formulated by Feldstein. While the first talks about a “suffering economy,” the second insists on being preoccupied about the future of inflation.
SAO PAULO | By Marcus Nunes | The WSJ has a piece which closely reflects the consensus view on the matter: “Japan´s Sales-Tax Boost will Test Abenomics”: The tax increase is designed to pay for Japan’s ballooning social-welfare costs and to pare its huge public debt, which, at more than twice the size of the economy, is the largest among rich nations.