By Carlos Díaz Guell | While the German chancellor refuses to give in to the growth pact for which half of Europe sighs, Hollande leads the southern countries’ complaints, very aware that France’s economic stand is getting weaker by the quarter. It’s inflation’s fault.
The Federal Reserve is hoarding Treasuries, interest rates in the US have plummeted and the inflation menace overhangs like a large knife above the American economy. Not at all, points out economist Luis Arroyo.
Inflation in the euro area remains anchored at 2.4 percent, although differentials between countries are growing. Analysts at CaixaBank warn governments about raising VAT rates to increase income.
Economist Ricardo R. Reis expects “better policymaking from the European authorities now.” Originally from Portugal, Reis teaches at Columbia University, he is a former graduate from the London School of Economics and Harvard Ph.D and has worked extensively on inflation dynamics and monetary and fiscal policy, including evaluation of fiscal stimulus programs. He gives his take on the current economic turmoil for our readers in the first of a summer…
By Luis Arroyo, in Madrid | Central bankers are incapable muppets covered with majestic pomp. The crisis has unveiled their naked, sad truth but what keeps them on their feet is that most people do not bother to properly scrutinise what they do and what they say. Crisis Maven is a blog devoted to analysing the words and actions of the Bank of England. It is a very curious case, that of…
By Luis Arroyo, in Madrid | The US economy is on its way up to the growth heaven while others, like Europe, live under the knife. Broad money or M3 volumes have increased in the US by 10pc. In terms of what it is strictly required, the Federal Reserve is fulfilling its duties. The broad money supply includes factors of money supply and money and credit demand, which means that there is activity in all money and financial markets. The…
By Luis Arroyo, in Madrid | Look at the USA. In the graph above, left scale, the yields (spreads of Treasuries) of BB corporate bonds (red line), and B (green line). Right scale, blue line, inflationary expectations (type of bond at 10 years minus the same inflation protected). A functional relationship can be detected between the variations in inflation expectations and private bond yields. The higher the expected inflation, the…
JP Morgan expects that US Federal Reserve will announce that it is to auction between $300bn and $400bn in Treasuries with one to three years to reach maturity, and that it will concentrate 70% of its purchases on seven to 12 year-maturity securities while the other 30% will be on longer maturities. The bank believes that the Fed will carry out these acquisitions within the next 6 months. “The benefit…
JP Morgan expects that US Federal Reserve will announce that it is to auction between $300bn and $400bn in Treasuries with one to three years to reach maturity, and that it will concentrate 70% of its purchases on seven to 12 year-maturity securities while the other 30% will be on longer maturities. The bank believes that the Fed will carry out these acquisitions within the next 6 months. “The benefit…