Compared with many of my peers in the financial industry, I’ve been using a very different framework to analyse the evolution of the global economy since its reopening from COVID-19. While most have fruitlessly tried to.
Central banks have been raising interest rates aggressively for just over a year. During that period – the fastest and broadest monetary tightening episode in history – investors have been anxiously waiting for.
There is a bull market in sellside economists predicting recessions. Ask any of them why they believe 2023 will produce an even worse macro environment than 2022 and you can be sure the words “long and variable lags”.
Since we first published our annual “Things that won’t happen” outlook in 2015, writing outlandish non-forecasts has become considerably more difficult. Back then, nobody would have taken us seriously if we had said.
There is beautiful irony in macroeconomics, a sort of inherent Minsky dynamic, or universal Goodhart law, that means that just when everyone thinks something is definitively true, it turns out to be spectacularly false..#Federal Reserve #Monetary Policy #Interest Rates #Recession #Unemployment
There are any number of ways to dissect the spread between the 7% job openings rate and 3.5% unemployment, but the needed drop in demand’s contribution to current inflation occurs when this spread turns negative..#Federal Reserve #Monetary Policy #Interest Rates #Recession #Unemployment
The story of this cycle does not end when recession begins, the story, in fact, begins with the direction Fed policy takes once unemployment starts to rise. Recession of some sort was always inevitable to curb.#Federal Reserve #Monetary Policy #Inflation #US Economy
Every investor wants to know whether central banks are prepared to cause a recession in order to force inflation down. Surely, officials are bluffing, right? But think about it from the central banker’s perspective..#Central Banks #Monetary Policy #Eurozone #United Kingdom
The breadth of the commodity rally started narrowing in early March, when the dust from Russia-Ukraine shock began to settle. Industrial metals topped out first and rolled over decisively in April – around the same time.#Federal Reserve #China #Commodities
The markets remain caught in the pincer movement between a hawkish Fed and slowing world growth: 2022 is “payback year” following the outsized gains of 2021. Inflation looks like it is about to peak but at the same time.#Federal Reserve #Monetary Policy #Inflation #China #OPEC