macroeconomics

Relevant News Item, World economy 15th February 2023

One step forward, two steps backward for inflation: data starts to look more erratic after first big downward adjustments in late 2022

Santander Corporate & Investment | There are no divisions here, inflation data are undoubtedly starting to look more erratic after the first big downward adjustments at the end of 2022, falls that raised hopes of a pivotal moment for central banks and explained a large part of the unprecedented January rally in the markets. Base effects will be the main ally for much of 2023, but our economists believe that…

In Europe, Markets 12th January 2023

Germany calls on EU to create joint financing instruments to counter US green plan

Intermoney| Despite central bank messages, the news that moved the bond market on Tuesday was German Chancellor Olaf Scholz’s request to the European Union to create joint financing instruments to counter the US green plan. Bond yields fell as investors reduced bets on the scale of monetary tightening and positioned themselves for more fiscal burden-sharing in the bloc. A slower pace of tightening is good news for Italian bonds, as…

In the World 11th January 2023

UK to cut “unsustainably expensive” business energy subsidies by 85%

The UK announced on Monday that it will cut its business energy subsidies by 85%, deeming the current subsidy package “unsustainably expensive”. The current subsidy package ends in March 2023 and costs £18.4 billion. It will then abandon caps of £75 per MWh for gas and £211 per MWh for electricity and give a discount of £6.97 per MWh for gas and £19.61 per MWh for electricity from April 2023…

In Europe 16th July 2016

Does Brexit Lead to X-Exit?

BoAML | After Brexit, we followed through on our scenario analysis, penciling in a full-blown UK recession, cutting 0.5% off of Euro Area growth and slicing 0.2% off of US and global growth. Events since Brexit have not changed our call. The pound has plunged more than 11% since the vote, and both consumer and business confidence have tumbled.

Markets 14th July 2014

An explicit NGDP level target is much better than IT

SAO PAULO | By Marcus Nunes via Historinhas | David Beckworth has a very good article “Inflation Targeting – A monetary regime whose time has come and gone.” A very short summary of the argument is given here: “What, then, would characterize a robust monetary-policy regime? Based on the discussion above, it would be one that does not respond to supply shocks, but does vigorously respond to demand shocks.

World economy 10th December 2013

Global recovery: The clock is ticking for risk assets

LONDON | Barclays analysts | The global recovery remained modest in 2013, inflation was somewhat lower than expected, and monetary policy in the developed countries became even more supportive. While these fundamentals would normally suggest that bonds would outperform stocks, the opposite occurred, and in a very big way: bond prices plunged and equity prices soared.

World economy 2nd December 2013

“Unconventional” monetary policy: A “snake pit”

SAO PAULO | By Marcus Nunes | According to Lars Christensen, central bankers around the world talk about monetary policy as being “unconventional” when they undertake “quantitative easing” to expand the money base. This term frustrates me a great deal as there is nothing unconventional about the fact that the central bank is changing the money base.

World economy 25th November 2013

John Taylor: In Monetary Policy the Problem Is Cyclical, Not Structural

SAO PAULO | By Marcus Nunes | John Taylor talks vaguely about “policy”. To MMs, it´s very much about inadequate monetary policy.

World economy 5th November 2013

Global Economy: Heading Toward a Cliff

SHANGHAI | By Andy Xie via Caixin | The global economy is likely experiencing a bigger bubble than the one that unleashed the 2008 crisis, and should it burst the ensuing recession would be mammoth.