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Macro Focus ENG

Macro Focus: An update on the US economy

Key takeaways The softening of the US recovery is continuing apace with different components of the macroeconomic compound showing signs […]

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Central Bank Watch Macro Focus ENG Market focus ENG

From talking the talk to walking the walk: the Fed’s on tapering mode

Most participants to the FOMC July meeting noted that, provided that the economy were to evolve broadly as they anticipated, it could be appropriate to start reducing the pace of asset purchases this year because they saw the Committee’s “substantial further progress” criterion as satisfied with respect to the price-stability goal and as close to being satisfied with respect to the maximum-employment goal.

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Macro Focus ENG United States

The COVID conundrum: Consumption, inflation and GDP growth

The COVID-19 recession brought to the fore some very unusual and puzzling patterns between different macroeconomic aggregates, with supply side bottlenecks and shortages, record consumer inflation and the unusual coexistence of an unusually tight labour market altogether with record labor slack. The COVID recession itself lasted only two months according to the NBER’s Business Cycle Dating Committee. The fiscal and monetary response to the pandemic has corrected some of its most dire human and economic consequences but it has also led to new imbalances and it has magnified some of the imbalances that existed prior to the pandemic. The combined impact of all these imbalances, direct and indirect effects of the pandemic on supply and demand have shaped a very peculiar COVID-19 related business cycle, giving rise to what one might call “the COVID-19 conundrum”.

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China Macro Focus ENG

Macro Focus: China Q2 GDP and other macro indicators

According to the data released by China’s National Bureau of Statistics, in Q2 2021, China’s gross domestic product (GDP) reached […]

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Macro Focus ENG

Macro Focus: US Consumer Prices in perspective

The latest reading of the US Consumer Price Indexes for June compiled by the Bureau of Labor Statistics showed how the double impact of a surging US and global demand and lingering supply side constraints translated into turbo-charged consumer prices. In this article, we analyse in detail the latest CPI figures and elaborate on their potential path in the coming months.

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Central Bank Watch Macro Focus ENG

Macro Focus: Taking stock of the ECB’s new monetary policy strategy

Following the conclusion of its Monetary Policy Review, the ECB has updated its monetary policy strategy. The main evolution is the replacement of the ambiguous “below, but close to two percent” inflation target by an unambiguous two per cent inflation target over the medium term. The Governing Council’s commitment to this target is symmetric, meaning that negative and positive deviations from this target are considered as equally undesirable. In line with the Federal Reserve’s new average inflation targeting framework, the ECB acknowledges the necessity to tolerate above target inflation in order to anchor long term inflation expectations at two percent. The second change is the introduction of climate risk as an input in the Central Bank’s monetary policy operational framework. In this article, we analyse the rationale, the technicalities and the potential implications of these changes.

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Macro Focus ENG

Macro Flash: Reading through the FOMC June 2021 economic projections

The FOMC Meeting convened on June 15-16 surprised the markets with ramped-up expectations for future interest rate hikes expressed by some of the participants to the Meeting. But the accompanying documents released after the meeting include other interesting insights, which help further assess the outlook for monetary policy going forward.

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Macro Focus ENG

Macro Focus: Unveiling China’s macro dilemmas and policy choices

China’s 2020 stimulus was modest. The country’s leadership learned the lessons of the 2009 giga stimulus and the imbalances that stemmed from it. More importantly, we show in this piece that the focus has shifted from credit control/guidance – both traditional and non conventional – to other policy instruments. The main candidate for these new policy instruments is fiscal policy. This should translate into a continuation of the substitution of private debt by government debt going forward.

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Macro Focus ENG Premium

Macro Focus: Economic Impact of the $1.9 trillion American Rescue Plan

An unprecedented fiscal support As of April 2021, the United States leads by a wide margin the Discretionary Fiscal Response […]

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China ENG Macro Focus ENG

China: Key takeaways from the Government Work Report for 2021 (政府工作报告)

Premier Li Keqiang first outlined the measures taken by the Chinese government in the context of the Covid-19 pandemic whose […]