Turkey’s battered banks face a slow-burn crisis 25 Mar 2021 A plummeting lira creates the risk of a funding squeeze for Garanti BBVA, Akbank, Isbank and others. But they’ve survived past crises without a bank run. The more likely problem for the sector is mounting bad debt, which will drag down returns and capital for years to come.
South Africa offers Erdogan an inflation lesson 23 Mar 2021 A steep plunge in the lira, of the sort seen this week after Turkey’s president fired his central bank boss, usually drags down the rand. Not this time. The South African currency’s resilience shows the value of a credible and independent central bank left free to control prices.
Capital Calls: Airline IPO, Turkey’s central bank 18 Mar 2021 Concise views on global finance in the Covid-19 era: U.S. regional air carrier Sun Country Airlines’ IPO pop is justified by positive cash flow; Turkey shows how emerging-market policymakers face trickier choices than their rich-world peers.
Powell’s inequality goals put him over his skis 17 Mar 2021 The Fed boss wants to close the racial employment gap that widened as a result of the pandemic. But helpful policies are outside of Powell’s mandate, and stimulus might actually exacerbate the problem. The consequence is the economy could overheat before the gap closes.
The Exchange: The post-pandemic global economy 2 Mar 2021 Policymakers will face tricky choices about when to withdraw massive policy support as economic recovery kicks in. BNP Paribas’ group chief economist, William De Vijlder, joins Swaha Pattanaik to discuss their options, the focus on inclusive growth and the outlook for inflation.
Central banks will have to fight reflation tantrum 26 Feb 2021 Improving economic prospects have boosted bond yields. Fed boss Jerome Powell and his global peers will welcome the cause but not the effect. If their rhetoric can’t halt the sharp rise in borrowing costs, they will be forced to ramp up asset purchases to safeguard the recovery.
Wrong sort of inflation is coming down the tracks 14 Jan 2021 A global food price index has been rising. When commodities like cereal grow dearer, consumers end up paying more. The poorest in developed and developing economies, who spend a higher proportion of income on basics, will feel the pinch as wages are unlikely to keep up.
Corona Capital: Inflation, Poshmark 14 Jan 2021 Concise views on the pandemic’s corporate and financial fallout: Breakingviews panel predicts the end of the free-money era; and Poshmark’s IPO looks overdressed.
Forces lowering euro zone inflation aren’t all bad 7 Jan 2021 Euro zone consumer prices fell 0.3% in December from a year ago. Several factors, especially a weak economy, are to blame. Still, a long-term trend that also chips away at inflation is cheaper tech. That’s not something even ECB chief Christine Lagarde would want to see reversed.
Corona Capital: Icahn, Productivity, Natixis 4 Jan 2021 Concise views on the pandemic’s corporate and financial fallout: Carl Icahn sells half his Herbalife Nutrition stake; an ECB survey suggests Covid-19 will make big firms more productive, but that may not be all good news; and Natixis fast-tracks its overhaul.
Higher U.S. inflation hopes finally look credible 2 Dec 2020 Market gauges of how consumer prices are expected to behave in coming years hit their highest in a year and a half. There have been false dawns before but 2021 may be different. Vaccines will help unleash pent-up demand, and policymakers are intent on ensuring a robust recovery.
ECB has chance to avoid Fed’s strategy revamp flaw 12 Nov 2020 Christine Lagarde’s central bank is examining basics, like how it defines its price goal. Its U.S. peer earlier this year switched to aiming for inflation that averages 2% over time. But leaving things as vague as Jerome Powell did undermines efforts to lift price expectations.
Review: Picking the turning point in inflation 16 Oct 2020 In “The Great Demographic Reversal”, Charles Goodhart and Manoj Pradhan make a good case for why prices will take off. Ageing societies need more carers and labour scarcity may finally lift wages. But they’re perhaps too sanguine on how soon pandemic-stricken economies can heal.
The Exchange: Terra incognita 13 Oct 2020 The U.S. faces more uncertainty as 2020 ends, including inflation, antitrust enforcement, and how the next president handles taxes, trade and the post-virus economy. So says Nathan Sheets, chief economist at PGIM Fixed Income. He argues tackling inequality should be a priority.
The Exchange: The long wait for inflation 6 Oct 2020 Charles Goodhart and Manoj Pradhan tackle an issue perplexing policymakers and investors: if, and when, price pressures will rise. The authors of “The Great Demographic Reversal” discuss ageing societies, emerging economies, and why the world won’t follow in Japan’s footsteps.
Corona Capital: Vegan eggs, Target’s online fiesta 19 Aug 2020 Concise views on the pandemic’s corporate and financial fallout: A maker of chicken-free egg products accelerates its IPO plans amid Covid-19, while U.S. supermarket group Target shows that preparedness is everything in e-commerce.
Does $20 trillion buy much inflation? 11 Aug 2020 The market’s answer is a firm no. Global stimulus worth over 20% of world GDP has been unveiled, on Bank of America’s numbers. Future price expectations are rising but have yet to bust central bank targets. These low readings show the continuing mystery of inflation’s causes.
Chancellor: Inflation as the post-pandemic cure 25 Jun 2020 The massive fiscal deficits engendered by the virus should see off deflation. The spectre of rising prices now beckons. While its potential horrors shouldn’t be downplayed, inflation can resolve great imbalances and festering social discontents besetting the global economy.
Hadas: Covid gives monetary extremists false hope 27 May 2020 Those who fear rising prices think anti-pandemic stimulus will surely unleash uncontrolled inflation. Deflation-worriers are just as certain that the global demand shock means their old enemy is lurking. Both disasters are possible, but policy and habit point to price stability.
ECB’s low inflation problem is worse than it looks 30 Apr 2020 Depressed energy costs meant euro zone consumer prices rose 0.4% in April from a year ago. But President Christine Lagarde may in reality be even further away from her just-below 2% goal. Statisticians’ efforts to fill data gaps during lockdown risk overstating price pressures.