Debt and monetary normalisation, a complicated cocktail
After nearly a decade of easy money, the financial markets and the economy have not just become addicted to debt, but also indifferent to the continued growth in global debt.
FED
Low inflation sparks monetary policy confusion
The trend in inflation is confusing those in charge of monetary policy. After a significant uptick in the last part of 2017, it has really stagnated, in stark contrast with the growing dynamism of the economy.
“What will the year 2018 be like?” A persuasion test
How do I see the year 2018? Low growth and productivity, a declining working population, and an unsustainable rise in animal spirits. Everything comes to an end, and the longer it takes, the worse it is.
Is it time to normalise interest rates?
There’s an idea circulating amongst the central banks or, more accurately, amongst pressure groups in the central banks. The crux of this idea is: “the central banks should normalise interest rates”.
Fed and ECB: Sticking to gradualism and predictability
Both the Fed and the ECB remained gradual and predictable in their last week meetings as far as monetary policy is concerned. In opinion of Julius Baer, this prevented EUR/USD from taking a specific direction, “but monetary policy in the US and the eurozone are still diverging and justify a slightly stronger US dollar in the next month.”
“There Is Some Problem With The Productivity Statistics”
Mohamed El-Erian, currently chief economist with German insurance group Allianz, and touted as a possible sucessor to Stanley Fischer, believes that monetary policy cannot do any more. And that the governments of the democratic countries have not been capable of coordinating economic policies which solve the problems created by the last crisis.
Is This The End Of The Dollar’s Supremacy? Could The Yuan Replace It?
Could the yuan substitute the dollar and become the predominant currency? I would ask the following question: if you had some dollars, would you change them for yuan? No you wouldn’t, would you? We would like to demonstrate that the yuan is in no way a substitute for the dollar.
Jerome Powell, A “Low-Interest-Rate Guy”
US President Donald Trump eventually nominated Federal Reserve Governor Jerome Powell as next chairman of the Federal Reserve. Governor Powell has never dissented from the policy actions of the FOMC during his five years as a voting member. However, it remains to be seen how he will make his own mark on the US central bank.
The Fed Is Shrinking Its Balance Sheet—But Why?
Benjamin Cole | The worldwide bond market tops $100 trillion, and we live in a world (as we are incessantly told) of global capital markets. All told, there is more than $217 trillion in global debt outstanding, and that figure rises by many trillions every year, reports the Institute of International Finance.
Global economy gains further momentum with September leading indicators
The latest set of September PMIs published yesterday showed that global economic growth momentum will remain very strong until year end, with the US, Europe and Japan set for even higher growth in Q4 2017 and only a minor cooling of economic growth in China. This bodes well for a continuation of US rate normalisation in December 2017.