US consumer and corporate loan growth are picking up The Fed ignores money, pays attention to credit Central banks say one thing, do another US broad money growth is accelerating again after easing somewhat in late 2020.[1] In the year to February, broad money grew by 14.1%. While this was the…
Markets have woken up to the inflation risk Central bankers, however, display less concern But markets may still underestimate the extent of coming inflation Bond yields have begun to rise and equity markets have fallen, both developments apparently because market actors have woken up to the risk of higher inflation.…
Recent inflation data is generally weakening.But the pandemic and various degrees of lockdowns make CPI data meaninglessBusiness and consumer surveys are beginning to hint at coming price rises The end of the month is usually when countries publish updated inflation numbers. Latest data show price pressures in the largest economies…
Markets expect Chairman Powell to signal a shift towards ‘average inflation targeting’ AIT makes sense in many ways, but also has weaknesses The medium-term effect will be an acceptance of higher inflation Later today, Fed Chairman Jerome Powell will address (virtually, needless to say) the annual Kansas City Federal Reserve…
The post-COVID-19 world will see an increase in distance-working. But not everyone can or wants to work from home. Offices will remain but there will be less demand for them. Surplus CBD office space can be converted to residential use, with multiple benefits It always feels silly to intentionally position…
Economic data remains weak and Q2 GDP numbers will be awful almost everywhere But confidence is rising, if from low levels and frequently rising more than expected It is difficult to spot real time turning points, but it does seem that the recovery has begun Q2 GDP data will begin…
Output growth in the second half of 2020 and 2021 is likely to be well above trend Current inflation data is meaningless, but 2021 and 2022 will see high inflation This assumes that global lockdowns end over the summer This is a follow-up to The case for higher inflation published…
Over the past two months, broad money growth has surged in key world economies This monetary stimulus, part of the response to the COVID-19 pandemic, will remain in place Sustained double-digit broad money growth is inconsistent with subdued inflation (It is more than a year since I last published a…
Business and consumer confidence have recently deteriorated after a strong 2018 Levels are still high, but the trend is worrying Continued falls would imply a longer and deeper downturn in 2019 One of the peculiar developments for much of 2018 was that, while broad money growth slowed substantially (something we…
The global policy mix is shifting from loose monetary/tight fiscal to loose fiscal/tighter monetary This will exacerbate the 2019 slowdown already heralded by monetary data Financial assets will suffer For much of the post-Great Recession era, economic policy in most major economies has been characterised by a mix of tight…
