Monetary Policy
An investor might not guess it from the Trump administration’s impatience with bond-market, military and tariff roadblocks, but the US economy is faring just fine. Asset allocators should remain fully invested as per their benchmarks.
The Bank of Korea (BoK) delivered a second consecutive hike by raising its policy rate by 25 bps to 3.0%. While another hike is possible this year, our Emerging Markets strategists think a surging Korean won will tighten financial conditions enough to…
We expect Chairman Warsh’s first Jackson Hole speech to focus on his task-force agenda rather than provide guidance on the September meeting. The speech matters because it is Warsh’s first appearance at Jackson Hole, his first speech as Chairman outside…
The July Personal Income and Outlays report showed firmer household income, flat real spending, and no renewed acceleration in inflation, giving the Fed little reason to tighten more aggressively. Nominal spending rose 0.2% m/m, slightly above estimates, but…
Australia’s latest inflation beat will keep RBA tightening risk alive, but the forces shaping inflation over the next year are becoming more disinflationary. Headline CPI eased to 3.5% y/y in July from 3.8%, but exceeded the 3.3% consensus. While trimmed-mean…
The Bank of Thailand kept its policy rate unchanged at 1%, against a backdrop of weak domestic demand and a still-elevated energy import bill. Although inflation has slowed and domestic demand subdued, the BoT continues to face significant imported inflation…
The US Treasury department’s attempts at yield suppression are doomed to fail unless the Federal Reserve gets involved.
If bond yields rise due to widening bond term premiums or escalating inflation expectations, Bessenomics is unlikely to avert a stock-bond collision. Buy back gold mining stocks.
The Riksbank held rates at 1.75%; hikes remain unlikely given soft growth, rising unemployment, and below-target inflation. Policymakers kept the door open to a hike later this year, citing inflation risks from supply disruptions tied to the Middle East…
The July Fed minutes showed a broader hawkish bias than the vote suggested, but softer data since the meeting have reduced the urgency to hike. The FOMC held rates at 3.5%-3.75% despite three dissents in favor of a 25 bps hike. The minutes revealed support…