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Marcus Nunes/Feb 4, 2016 Draghi Warns on Risks of Low Inflation European Central Bank President Mario Draghi hit back at a warning from Germany’s Bundesbank that the ECB shouldn’t overreact to a sharp drop in oil prices, underlining his readiness to launch additional stimulus to shore up ultralow inflation. In a speech at the Bundesbank’s
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Marcus Nunes/Feb 4, 2016 Janet Yellen and the Federal Reserve are on another planet: That’s the message from global investors who are sending the Fed a big distress call to come back to earth. The Fed is still predicting four interest rate hikes this year, but the market now forecasts zero hikes in 2016. The
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James Alexander/Feb 3, 2016 The role of the President of the NY Fed is to be the lightning conductor of market sentiment to the FOMC. The NY Fed is the operating arm of the FOMC, conducting the open market operations. Because of this importance the President of the NY Fed gets a permanent vote at
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James Alexander/Feb 3, 2016 Back in late October we highlighted the collapse in growth of UK NGDP as proxied by the release of the 3Q15 Nominal Gross Value Added (GVA) figure. Things have now worsened. Growth has dropped from 2% YoY to less than 1%. Where is the Bank of England? Where are their political
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Marcus Nunes/Feb 2, 2016 In early January, he thought four rate hikes in 2016 was in the “ballpark”. In a speech yesterday he was less sanguine, but still believes monetary policy remains accommodative. The framework under which the Fed operates, which Kocherlakota, who knows what he´s talking about, clearly set out recently, permeates the Fischer´s
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Benjamin Cole/Jan 31, 2016 In general, the “class glass” is a poor lens for analyzing U.S. politics and macroeconomic policies. To be sure, the nation has interest-group politics in spades, and groups are often well-financed. And certainly, whenever past Dallas Fed President Richard Fisher sallied forth there was the potential for embarrassing spectacle, as when
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Marcus Nunes/Jan 29, 2016 That´s what you get when you do GDP component analysis. Sounds smart but is utterly useless: Macroeconomics should be about aggregates, not components of spending. Yes, changes occurring in the various components of GDP can impact interest rates, and thus velocity. And if monetary policy is inept (i.e. doesn’t offset changes
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James Alexander/Jan 28, 2016 According to the UK Office for National Statistics (ONS) the reason for the heavy downward revisions to UK NGDP are due to heavy downward revisions to the implied GDP Deflator. The deflator is “inflation” as measured for national income statistics. It broadly follows the unreliable, because never revised, UK CPI figures
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Marcus Nunes/Jan 27, 2016 To them, inflation, or its absence, is purely a cost phenomenon, pushed up or down by oil prices and/or the dollar and unemployment! Worse, they insist on reasoning from a price change! From the statement: Inflation is expected to remain low in the near term, in part because of the further
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James Alexander/Jan 27, 2016 I need to apologise. On 23rd December I was asleep on the job of monitoring UK NGDP. Having posted in October on the collapsing proxy for UK NGDP in 3Q15, “Nominal GVA”, and then posted again in November on the first estimate release of actual 3Q15 NGDP, I had not thought
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