Both main central banks face a challenging outlook. The ECB may have saved the day recently by showing it still commands enough firepower to support the economy, even if its room for manoeuvre seems hopelessly narrow. The Federal Reserve seems caught in a nasty trap.
Julius Baer Research | Against all odds the US Federal Reserve (Fed) continues to show a bias towards normalising rates. Comforted by stabilising financial conditions and a pickup in inflation, the Fed will try to guide market expectations towards additional rate hikes this year.
Benjamin Cole via Historinhas | Thanks to the extraordinary insights of blogger Kevin Erdmann, the issue of US housing costs and inflation has been brought into better focus. Erdmann recently brought up manufactured housing, or house-trailers, a wonderful topic.
Benjamin Cole via Historinhas | Motor vehicle sales are booming in the United States, up 10% in the last year, and double since the Great Recession. Thanks to blogger Kevin Erdmann of Idiosyncratic Whisk, we have a better understanding of inflation in the U.S. and the role that ubiquitous local property zoning plays in suffocating supply, and thus boosting price.
With all the talk of an imminent interest rate hike, there are likely to be winners and losers.
It is a simple story of failure, but one that fits the facts. It´s also based on a simple premise: An inflation obsession that took hold in 1974.
LONDON | UBS | Lower oil prices are evaluated as essentially “a wash” for the US economy.
The US economy is gaining momentum in the second quarter with an estimated 2.3% growth, supported by consumption and construction investment.
LONDON | Barclays | The US dollar strengthened after the FOMC left the door open for a September move, although it did not provide any strong signal for the timing of the first hike.
May 21, 2015 | By UBS analysts | The March FOMC statement had disposed of patience with regard to the funds rate, clearly preparing for the possibility or even likelihood of raising rates in June. But Q1 growth slowed more than expected, and the FOMC became more cautious in its April statement.