James Alexander via Historinhas | We often hear from both the right and the left that the relative lack of growth in the US is mostly due to supply issues, in particular changing demographics. Those baby-boomers retiring have created a new stagnation. The US Bureau for Labor Statistics (BLS) has consistently encouraged this view. There’s really nothing that can be done about it.
NEW YORK | By Benjamin Cole Fisher via Marcus Nunes’ Historinhas |Dallas Fed president wants the institution to stomp on the brakes and quit Quantitative Easing (QE) now, and preferably yesterday. Indeed, Fisher proudly told his audience he would have been a bulwark against QE, if he could have been.
Benoit Anne (MFS Investment Management) | Last week, we witnessed some rather unusual activity among major central banks. Indeed, one central bank—the Swiss National Bank—delivered a rate cut, while another—the Bank of Japan—announced a rate hike. Sightings of unsynchronized monetary policy actions at the major central bank level are less frequent than sightings of UFOs in New Mexico. Not only that, but we are starting to get the sense of…
Alicia García Herrero (Natixis) | This year, China’s “Two Sessions” have been particularly important to understand where the Chinese economy is heading as it marked the beginning of a new era, that of Premier Li Qiang. Li Qiang’s first “Work Report” signifies a departure from the previous decade under Premier Li Keqiang’s leadership as Premier, where much more emphasis is put on supply than on demand forces. The focus on…
Banca March: Economic policy uncertainty and rising labour costs, the two concerns of the governor of the Bank of Spain, Hernández de Cos, who pointed out the need for greater regulatory quality and a strengthening of business confidence, in a political context in which companies are negatively impacted by the situation of uncertainty. All this, accompanied by an increase in non-wage labour costs -see graph- at the top of the…
Alicia García Herrero (Natixis)| The Bank of Japan (BoJ) has been in the limelight since major central banks in the world, as specially in Fed, started hiking rates. For months, as Japan began to see a rapid increase in inflation, financial markets started to put depreciating pressure on the Yen and upward pressure on the yield of Japanese Government Bonds (JGBs), capped by the Yield Curve Control (YCC) introduced by…
BancaMarch: Federal Reserve Chairman has confirmed the peak in official interest rates. Jerome Powell, has kept his January speech unchanged, indicating that monetary policy will change course at “some point this year”, without specifying a date. He also emphasised the risks of bringing forward the cuts too soon, resulting in a return of inflation and the need for an even tighter policy. Thus, the Fed will not cut rates until…
Banca March| After years in which the monetary authority has been in charge of acquiring the debt of member countries and fiscal rules were frozen, the flexibility granted to fiscal policies must now be limited in order to contribute to lowering inflation and debt ratios. This has been repeatedly conveyed by the President and the Vice-President. However, she pointed out that the reduction of public deficits should be carried out…
Link | The European Central Bank (ECB) published yesterday that in the Eurozone the monetary aggregate M3 rebounded 0.1% year-on-year in January (+0.2% in December), below the 0.3% increase expected by FactSet analysts. In addition, and also according to ECB data, bank lending to households in the euro area increased by 0.3% at a year-on-year rate in January (+0.4% in December) to €6.87 billion, slightly less than the 0.4% increase…
Bankinter : January CPI in Japan reaches +2.2% year-on-year vs. +1.9% expected and +2.6% previous. Underlying: +3.5% vs. +3.3% expected and +3.7% previously. Analysis: The price indicator decelerates for the third consecutive month, although it defies expectations in both readings. This slowdown is mostly due to a mirror effect in energy prices (-12.1% year-on-year). Since, after the strong rebound in energy, as of February 2023, the government implemented subsidies to…