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ECB will cut soon, but US divergence can’t be ignored
The European Central Bank is now on course to cut interest rates before the Federal Reserve, but sooner or later it will be captive to events in the US
Fed deals its cards early on rates
Fed deals its cards early on rates
Chart Room: A waiting game on rate transmission
The US continues to defy the gravity of rate hikes but a closer look at monetary policy transmission mechanisms suggests the effects are delayed, not denied.
Fed holds the line, hopes for a soft landing
Chairman Powell has set his sights on a gentler slowdown, but the impact of higher effective interest rates may hit consumers and companies hard next year.
Chart Room: The Fed’s ‘blocked drain’ conundrum
Despite signs of inflation easing off its peak, interest rate hikes have yet to flow freely and fully throughout the system.
BOJ: Patience is virtue
At its June meeting, the Bank of Japan has retained its dovish bias, and we believe markets will price in a lower possibility of an imminent exit from YCC.
A scenario analysis of the US debt ceiling standoff
A scenario analysis of the US debt ceiling standoff
Chart Room: What 80 years of data (and 11 recessions) say about today’s macro outlook
Historically, a tightening in financial conditions like the one that we have seen over the last year invariably led to a recession.
Chart Room: Bank blow-ups and tight labour markets make a hard day’s night for the Fed
Chart Room: Bank blow-ups and tight labour markets make a hard day’s night for the Fed
ECB still hiking but markets are focusing on the end point
President Lagarde tries to deliver another hawkish shock, but markets sense we are near the end of the hiking cycle for the ECB.
Chart Room: Falling US retail sales suggest inflation may have peaked
Real retail sales have fallen significantly since 2021. This suggests core inflation could be due to ease soon - and has almost certainly peaked.
Europe’s unequal gas demand destruction
Europe is already reducing energy demand in response to record high prices. While shortages appear unlikely this winter, next year could be a different story.
Chart Room: A 100-year view of inflation and asset returns
Long run inflation data show equities and bonds both perform better when inflation is falling. But what about today’s world of persistent price rises?
Chart Room: A pain in the bottleneck for supply chains
There are tentative signs that substantial supply chain bottlenecks in the US are starting to ease.
June's Rich Pickings podcast: Where next for inflation
"The market will wonder: is The Fed talking more aggressively but actually still way behind the curve?" says CIO Andrew McCaffery in June's Rich Pickings.
Chart Room: Staying afloat amid a rising tide of debt
Central banks have been playing a key role in keeping higher debt loads affordable.
June's Rich Pickings podcast: Know your enemy
"The anaesthetist has shown up to give morphine [to the global economy] but the doctor's still not shown up to do surgery," says Portfolio Manager Amit Lodha.
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