The Fed’s wavering over addressing the matter of its announced rate hike has badly affected the markets, increasing their volatility. It should act now, curbing any further speculation, and disregard recent calls from the IMF and the World Bank to further delay this move.
UBS | Monetary policy remains stimulative globally, and labor markets are tightening. Yet, global inflation is low.
Being one of the very few countries (two others are Poland and Israel) whose monetary policy managed to avoid a recession on the heels of the 2008-09 crisis, Australia is a natural object of Schadenfreude!
A future in which machines are more intelligent than humans still seems the realm of science fiction. Just trying to use the voice search function on your smartphone might suggests this is the case, and that machines won’t be dominating the world for a long time to come.
By Yukon Huang via Caixin | Promoting the yuan as a reserve currency makes more sense regionally, but this would mean accepting more volatility relative to the U.S. dollar.
How do we overcome a debt crisis with more debt? Bocconi University’s Marcello Minenna recalls that in a world with inflation it is always possible to control the behaviour of the debt/GDP ratio just by reaching negative real interest rates. Also, he points out that eight years after the financial meltdown the tight interconnections in real time between the global markets make the system intrinsically unstable.
The slowdown in oil prices affects all producer countries, both emerging and developed, whether Brazil, Mexico, Norway or the United States. The difference with the 90s is that EM are now much more solid.
By Alicia García-Herrero at Bruegel | Sitting on a pile of debt, China’s only way out is to deleverage: more pain now for sustainable growth later. [Figure: China’s augmented fiscal deficit as % of GDP.]
By James Alexander via Historinhas | Although it appeared that the VSPs gathered in Jackson Hole could only worry about non-existent inflation, I detected a defensiveness too.
Could emerging markets spillovers push developed ones into recession?