- Definitely not (yet) ‘taper tantrum’ II
- US Fed: Interest rates & dissension in the ranks
- New tactics from the BoJ – controlling the yield curve
- Deutsche Bank: Shades of Lehman? Not quite
- UK Economy: Clearing the first ‘fence’
Definitely not (yet) ‘taper tantrum’ II
The risk is not going to come from central banks responding to runaway growth and inflation. They’re winning the battle on that message. The danger will come if growth stalls and the much-talked-about fiscal response doesn’t happen in a swift enough fashion.
UK Economy: Clearing the first ‘fence
A continued belief in the persistent weakness of business investment in a climate of uncertainty has led the OECD to conclude that Britain’s exit of the EU will hit the economy harder than first thought. Their confidence in this belief was identified in their forecast that British GDP will slow to 1% in 2017.
US Fed: Interest rates & dissension in the ranks
While the case for a rate hike has certainly strengthened, for the time being, we believe the Fed is right to wait for further (and continuing) evidence of continued progress toward its objectives.
New tactics from the BoJ – controlling the yield curve
What remains now is for the government to make use of the potentially unlimited monetization of their debt and enact greater fiscal stimulus and reform. The path to the ‘helicopter money’ – permanent financing of government spending – has now been laid out. It remains to be seen whether the Abe government will take it.
Deutsche Bank: Shades of Lehman? Not quite
We cannot see a situation where the German government allows DB to fail, as the impact of Lehman brothers will be fresh in policy maker’s minds. Without DB, it would leave Germany without significant clout in global financial markets, as it seeks to improve Frankfurt’s position as an important financial centre in the wake of the Brexit vote and the possible loss of some status in London.
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