Fiscal

Highlights Without a true banking union it is impossible to have a true monetary union. The result is a fragmented monetary policy. A fragmented monetary policy with an inflexibly rigid fiscal policy is a recipe for economic and political polarization.…

Highlights China is turning moderately reflationary, but Xi's reform agenda will remain a drag on the economy, as China will not entirely abandon the "Reform Reboot" that began last October. Fiscal spending, rather than a sharp acceleration in credit…

Highlights Xi Jinping is trying to do two things at once: ease policy while cracking down on systemic financial risk; The trade war with the U.S. is a genuine crisis for China and is eliciting fiscal stimulus; Credit growth is far more likely to "hold…

Highlights The 2018 dollar rally is principally the consequence of the slowdown in global industrial activity and global trade, itself a reverberation of China's efforts to de-lever and reform its economy. For China, reforms and deleveraging are here to…

Dear Client, This week we are sending you two Special Reports. One report deals with the outlook for U.S. fiscal policy and government debt. It was written by Mark McClellan, Chief Strategist of the monthly Bank Credit Analyst, and was first published in…

Highlights Without swift and considerable fiscal austerity or aggressive privatization, Brazil's public debt situation will become uncontrollable. Brazilian voters' priorities and preferences are for more public spending, not fiscal austerity. Hence, the…

Highlights A flurry of policy announcements over the past month has given investors the impression that Beijing has turned the policy dial in the direction of supporting growth. We agree that China is easing at the margin, but several observations…

Highlights Subdued long-term inflation expectations and central bank bond purchases have suppressed the term premium. This is set to change, as quantitative easing turns into quantitative tightening and shrinking output gaps around the world start to…

Highlights Upside risks on base metals are being ignored. The U.S. labor market continues to tighten and businesses face escalating labor and input costs. There will be costs associated with current fiscal trends, even on a relatively short 5-10 year…

Congress is conducting a major economic experiment that has never been attempted in the U.S. outside of wartime; substantial fiscal stimulus when the economy is already at full employment. The budget deficit is on track to surpass 6% of GDP in a few years…