Next year’s US fiscal deficit will be roughly equivalent to the entire GDP of its northern neighbour. Electoral considerations will delay any serious attempt to reduce it – but action here can’t be postponed forever. On Monday, President Obama unveiled the White House’s $3.73 trillion budget for fiscal year (FY) 2012, setting the stage for [...]
Filed under: Economics, fiscal tightening, Uncategorized | Tagged: fiscal policy, forecasts, US | Leave a Comment »
Don’t expect any recent euro area pain relief to prove long lasting. Slower economic growth will hurt. Recent events in the euro area have taken some pressure off in the region. Government debt auctions in Portugal, Spain and Italy all drew strong demand last week. And maybe more importantly, signs that European officials were considering [...]
Filed under: Economics | Tagged: Euro area, euro area sovereign debt, fiscal policy, macroeconomics | Leave a Comment »
The US fiscal policy deal will be more supportive of households’ incomes than most had been expecting, and is likely to push up growth next year. But don’t assume that such a policy shift comes with no risks attached. This past week or two has been an interesting one from the point of view of US policy [...]
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The UK’s Office for Budget Responsibility (OBR) has ducked a fight with the Chancellor, making only minimal revisions to its growth forecasts and leaving its end-2009 output gap estimate unchanged. But the OBR may still have to square up to the government’s fiscal stance next spring. Today’s updated projections from the OBR were an opportunity for the new body [...]
Filed under: Uncategorized | Tagged: fiscal policy, macroeconomics, OBR, Office for Budget Responsibility, UK | Leave a Comment »
IMF/EU orbit may not be as straightforward as Ireland – and perhaps Portugal – hopes. Spain and Italy must also battle against economic gravity. For those of you not old enough to remember the Muppets, “Pigs in Space” was a spoof on Star Trek, in which a bunch of hogs boldly went, as it were, to discover [...]
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Policymakers had their chance today to Greece behind us, as it were – and help start to convince markets that Greece will not be permitted to become the next Lehmans. In fact, however, the ECB came across as being rather complacent, while the Fed seemed to be signalling that it is getting worried about the possibility of contagion spreading across the Atlantic – spooking the markets in the process.
Filed under: Economics | Tagged: Euro area, fiscal policy, FX, macroeconomics, markets | Leave a Comment »
The new IMF-EU bailout package for Greece adds a further 11 percent of GDP of spending cuts and tax rises. A fiscal tightening of this magnitude is the economic equivalence of suicide.
Filed under: Economics | Tagged: Euro area, fiscal policy, macroeconomics, markets | Leave a Comment »
The political landscape is being reshaped, and the presumption is that no one will get around to dealing with pressing economic issues. But a coalition government will probably end up making the right sort of decisions, from the markets’ perspective.
Filed under: Economics | Tagged: fiscal policy, macroeconomics, UK | 1 Comment »
Kevin Gardiner is Head of Investment Strategy, EMEA
Greg B. Davies
Greg B. Davies, PhD, is Head of Behavioural Finance
Henk Potts
Henk Potts is Market Analyst
