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.
Lagarde’s yen for consensus will be stress-tested 11 Mar 2021 The ECB will step up the pace of bond-buying to combat a rise in yields. Moving sooner wouldn’t have allowed President Christine Lagarde to get the governing council’s green light. Fast-moving markets may require speedier reactions than her instinct for forging unity permits.
Capital Calls: BoE, Soros, Infrastructure, Pay 3 Mar 2021 Concise views on global finance in the Covid-19 era: The Bank of England starts to embrace the green transition; George Soros has some advice for France; Joe Biden gets a timely reminder of the importance of infrastructure; climate laggards risk getting hit in their wallets.
Chancellor: A bear market in bonds is beckoning 2 Mar 2021 Bond bull runs tend to last for decades, making it nearly impossible to accurately predict a turning point. But recent fixed-income extremes, together with the complacent attitude of central bankers and investors, suggest history’s greatest bond boom has passed its sell-by date.
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.
Fed musical chairs takes away Wall Street’s seat 22 Feb 2021 Chair Jay Powell’s views on jobs make it easy for President Biden to rehire him when his term ends. The same isn’t true of the Fed’s top cop, Randal Quarles. His exit would make space for a more progressive candidate, potentially saddling banks with sterner capital requirements.
Precision is ECB’s enemy when picking compass 18 Feb 2021 President Christine Lagarde has stressed the need for favourable borrowing conditions to justify her 1.85 trillion euro crisis response. Rate-setters will in March discuss how to measure this concept. Being too specific may backfire and limit the central bank’s wiggle room.
BoE preps negative rate gun it doesn’t want to use 4 Feb 2021 Bank of England boss Andrew Bailey told lenders to be ready to cope with sub-zero interest rates at any point from six months’ time. The weapon will be a handy addition to his arsenal. Covid-19 variants or post-Brexit trade frictions may yet derail the growth rebound he expects.
The Exchange: Too much stimulus stores up big risk 26 Jan 2021 That’s the view of Oliver Baete, CEO of Allianz. Markets are pricing in vaccination perfection, as they’ve grown dependent on central bank and government largesse, he tells Rob Cox. But for the $97 billion German insurer, there’s still opportunity to be had in the year ahead.
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.
Christine Lagarde’s baby bazooka needs backup 10 Dec 2020 The ECB boss will deploy emergency stimulus measures, such as asset buying and ultra-cheap loans to banks, for longer but came up with no new tricks to boost Europe’s economy. Central bankers have been innovative in the crisis. It’s now governments’ turn to do more of the work.
Chatty ECB has a communications problem 2 Dec 2020 Chief Economist Philip Lane has since March spoken with a series of financiers after policy meetings, his diary shows. A perception that a select few have privileged access is best avoided. The even bigger issue is why the central bank has to work so hard to land its message.
Kiwis test limits of overburdened rate setters 26 Nov 2020 New Zealand Finance Minister Grant Robertson has suggested the central bank, which targets inflation and employment, might consider taking house prices into account when setting monetary policy. Interest rates are a blunt instrument that can’t hit too many goals at once.
Mnuchin and Powell create dangerous guessing game 20 Nov 2020 The U.S. Treasury secretary and Fed chief’s spat over unused bailout funds is a Rorschach test. Fiscal hawks may see an attempt to coax Congress into spending elsewhere. Others may see a petty gesture by an outgoing administration. The uncertainty is what poses the greatest risk.
Turkey gives investors early Thanksgiving treat 19 Nov 2020 The new central bank chief hiked a key interest rate to 15% from 10.25%, the biggest tightening in more than two years. He vowed to bear down on inflation and improved transparency by reducing the number of policy rates that matter. It’s a good start at rebuilding market trust.
The Exchange: Investing in a new macroeconomic era 17 Nov 2020 The U.S. faces a paradigm shift, as the era of monetary policy dominance ends and fiscal action becomes the major driver of growth. So argues Greg Jensen, co-chief investment officer at Bridgewater Associates. He says this means rethinking one’s approach to asset classes.
Republicans try packing the Fed before Trump exits 13 Nov 2020 The U.S. Senate will vote on Judy Shelton’s nomination to the central bank’s board. She was in limbo partly due to fringe ideas, like a return to the gold standard, and has shown her partisan colors. Installing her before the White House changes hands is bad monetary policy.
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.
Turkey’s new economy team will face fresh problems 9 Nov 2020 President Tayyip Erdogan installed a new central bank boss while his son-in-law quit as finance minister. Credible policymakers are more likely to hike rates. Just as well: without President Donald Trump, Ankara’s foreign policy – and the lira – are more vulnerable to sanctions.