Search results for: gdp

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Is Europe Heading for Japanese-style Deflation?

There are many parallels between the euro area today and Japan in the 1990s. The euro area appears to be on track to avert deflation in the short term.

Tagged with: Equities, Global Economy, Investing, Markets

Interest rates in a highly indebted economy

In a highly indebted economy, there is no fixed cap on the level of interest rates. Any increase in interest rates must be consistent with tolerable debt service ratios, the existing stock of debt and private sector savings.

Tagged with: Economy, Fixed Income, Investing, Markets

Neutral funds rate going up?

The idea of low neutral funds rate has surprising currency, but could erode with more evidence of solid growth. We believe incoming information suggests the neutral funds rate would be moving higher, not lower.

Tagged with: Economy, U.S. Economy

U.S. rates — Waiting for the sound

Latest data showing faster growth and shrinking gaps. Normalizing economy creates asymmetry in monetary policy outlook.

Tagged with: Economy, Investing, U.S. Economy

Missing links and multipliers

Several forces are colliding now and causing a downshift in the trajectory of the U.S. housing recovery. Household formations remain at multi-year lows due in large part to mediocre income and job gains in combination with high student loan debt by 25 – 45 year old homebuyers.

Tagged with: Economy, U.S. Economy

Three’s a party in India

Investors are concluding that the prospects for EM equities are as dim as ever. Yet evaluating EM as a monolithic whole is outdated and dangerous.

Tagged with: Equities, Global Economy, Global Perspectives

A less certain world favors high-quality stocks

Current sentiment indicators do not suggest that Europe is heading back towards recession, though GDP growth will remain subdued. If Q3 sees a rebound, full QE may be unlikely this year, but any further weakness will increase the pressure on the ECB to act.

Tagged with: Economy, Equities, Global Economy, Investing, Markets

Is Europe heading for Japanese-style deflation?

Although there are many differences that should ensure that the eurozone does not follow Japan‘s fate, policymakers will need to act forcefully if the risk of deflation intensifies. While the euro area appears to be on track to avert deflation in the short term, many euro countries are “one crisis away from deflation.”
The European Central Bank (ECB) claims to be ahead of the game, but policy needs to be more pro-active.

Tagged with: Global Economy, Investing

ECB asset purchases — Bazooka or damp squib?

With inflation expectations declining to the levels that preceded the recent shift in policy, should the ECB and the financial markets be worried? In our view, the ECB probably won’t be wholly impressed by the reaction of inflation expectations to recently announced measures, and will be keeping a close eye on favored measures.

Tagged with: Economy, Global Economy, Markets

Slack and Inflation

Low unemployment rate indicates modest slack in labor market. Decline in labor force participation now looks mostly structural.

Tagged with: Economy, Fixed Income, U.S. Economy
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