Executive Summary Expansion In European Defense European yields have significant upside on a structural basis. European government spending will remain generous, which will boost domestic demand; meanwhile, lower global…
Executive Summary Biden’s Low Approval On Foreign Policy The energy shock stemming from President Biden’s foreign policy challenges could get worse, especially if US-Iran talks fail. The energy and inflation…
Executive Summary Tracking Inflation In 2022 Our base case view is that inflation will moderate in the coming months, allowing the Fed to deliver a steady pace of tightening (25 bps per meeting). A 50 bps rate hike is…
Executive Summary Fed Chair Powell is attempting to steer the US economy between the Scylla of a recession and the Charybdis of entrenched high inflation. In the benign soft-landing outcome, the economy will continue to grow well…
Executive Summary Investors Think The Fed Will Not Be Able To Raise Rates Much Above 2% The neutral rate of interest is 3%-to-4% in the United States. This is substantially higher than the market estimate of around 2%. It…
Executive Summary The Market Has Priced An Aggressive Path For US Rate Hikes The Federal Reserve has joined other G10 central banks in increasing interest rates this week. However, this has been well priced by both the…
Executive Summary For the Fed, maintaining its credibility with a long sequence of rate hikes that does not crash the economy, real estate market, and stock market is akin to the ‘Hail Mary’ move of (American) football.…
Global equity markets enjoyed a healthy rebound on Wednesday. Asian equities led the move higher as pledges from Beijing to support the economy and capital markets improved sentiment among investors. Hong Kong’s Hang Seng…