Guest post by Jean-Sylvain Perrig, UPB Chief Investment Officer | The US economy is back on track. Its second-quarter bounce was sharper than previously thought and it is expected to stay on a reasonably good path of 3% in the coming quarters, thanks notably to a rebound in capex, a falling unemployment rate and a sharp improvement in the real estate sector. That will further boost consumer confidence, which has already reached its highest level in seven years.
WASHINGTON | By Pablo Pardo | Mark Zandi is chief economist at Moody’s Analytics, the department in charge of consulting, advising and providing services for businesses and financial institutions. Among its many activities, the firm advices several European banks with regard to the EBA’s and ECB’s stress tests. Moody’s created this department in 2007, after buying Economy.com –Zandi’s analysis company.
MADRID | The Corner | BNP Paribas shares rose more than 4% on Tuesday after the French lender said it could pay the landmark $8.9bn settlement with US authorities for transferring billions of dollars on behalf of Sudan and other Washington-blacklisted countries. More actors in the EU banking sector might need to pay billionaire fines.
MADRID | By The Corner | The Federal Reserve cut its asset purchase plan by $10,000 million more, as expected. Experts at Bankinter Broker point that from now on the FED will buy $20,000 million in treasury bonds and $15,000 million in MBS every month.
MADRID | By Luis Arroyo | Experts at Afi made an analysis of the US’ labour market to forecast a possible turn in the economic policy. The answer is that such market is yet far from standardization. We can see three different moments according to the standard deviation in the chart above.
WASHINGTON | By Pablo Pardo | Maybe central banks and market participants are giving too much weight to the unemployment rate when trying to gauge future inflation. Instead, they should look at the short-term unemployment rate, because the long-term unemployed risk becoming economic pariahs.
MADRID | By The Corner | The International Monetary Fund (IMF) revised downwards its growth forecasts for the US from 2.8% in April 2014 to 2%, and maintained 2015 outlook in 3%. Furthermore, the institution believes that the country will not achieve full employment before 2017.
SAO PAULO | By Marcus Nunes | According to San Francisco Fed president John Williams (and he´s far from being a lone voice) it seems “financial stability” is right up there together with inflation and unemployment.
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.