There was nothing to cheer about in the latest readings of business confidence in Germany. The Purchasing Managers’ Index (PMI) from IHS/Markit moved into recessionary territory in September. Sentiment in the manufacturing sector declined to 41.4, which is the lowest level since mid-2009, at the depth of the financial crisis.   Same message came from…

Last week brought a lot of talk of an American and even a global recession. A slew of weak economic data from China and the German industrial sector underpinned the negative narrative. The recession indicator from the Federal Reserve Bank of New York now shows a 31 percent chance of a recession in the US…

What a week.   Even by the tumultuous standards of the Trump presidency, the last week has been quite busy. Federal Reserve did the warmups, but it was the escalation of the trade war with China, which really got the party started. We are now close to a global currency war, which could easily spin…

An ambitious government On 22 July, Prime Minister Kyriakos Mitsotakis’ New Democracy government won a vote of confidence after three days of debate in the Greek parliament. The vote was a formal endorsement of the government’s policy program after the decisive victory in the election on 7 July. With 40 percent of the votes –…

It has been a remarkable week for central banks and the global economy. It was the week where the bureaucrats controlling the monetary system lost the plot. In Portugal, ECB President Mario Draghi almost promised to make negative interest rates even more negative. In Washington, Federal Reserve Chair Jerome Powell went further out on a…

It has been quite a week in trade. President Trump’s announcement on 3 May that he had lost patience with China caught most by surprise, particularly because the President and his administration has been signalling optimism for weeks and months. One week later there is no trade deal, and tariffs on Chinese goods worth USD200…

The global outlook has been marked down again, but data out of China have shown a pickup in activity, while Europe and some EM-countries are weakening. Policies in Washington – trade and monetary – remain pivotal to the outlook, but Brexit and a renewed budget-standoff between Italy and the EU also loom large. Oops!… I…

One of the most intriguing growth stories over the past year is the sudden stop in the German economy. At the end of 2017, GDP-growth hit 2.8 percent with contributions from both domestic demand and the ever-efficient export sector. Then a series of events occurred in 2018: a flu epidemic, strikes, and a dry period…

Five weeks ago, I argued that the US economy was strong enough to warrant another couple of interest rate increases during the first half of 2019 followed by a pause. Economic data since (and the prolonged partial shutdown of the federal government) has justified a more cautious approach to short-term monetary policy.   The situation…

The latest update of IMF’s World Economic Outlook was not pleasant reading. It was the second 0.2 percentage points downgrade of the forecast for 2019 in three months. This time to 3.5% – the lowest growth rate since the mini-EM meltdown in 2015/16. Moreover, the risks to the outlook are to the downside and more…

While markets have been fretting about the risk of a recession in the US, the euro area is moving much closer to a negative growth surprise. The deterioration of confidence has been steady and broad-based, but pockets of substantial weakness are adding to downside risks. Central to the gloomy situation is the German manufacturing sector.…

Christmas was muted in Washington this year.   With a quarter of the federal government shut down for the foreseeable future, many furloughed federal workers, those living paycheck to paycheck, are having a particularly gruesome time. The budget standoff could well extend into 2019, when Democrats take power in the House of Representatives. The quitting/firing/retirement…

When the oil-producing countries (OPEC) and Russia met in Vienna early December, they had managed to lower expectations quite substantially. Hence, the agreed production cut of 1.2 million b/d took the market by surprise. OPEC-countries will reduce production by 0.8 million b/d, while the non-OPEC group led by Russia will cut by a further 0.4…

The French President Macron made a series of expensive promises in his national address on Monday night in an attempt to placate the gilets jaunes protesters, who have transformed inner cities into battle zones across France. One must hope the movement appreciates the gesture, because Macron is risking his entire political project on this. Most…

At the G20-meeting in Buenos Aires, President Trump and China’s President Xi agreed to a truce in the ongoing trade war. Affirming their respectful relationship, the two leaders agreed to stop the clock on new measures and allow for 90 days of negotiations. President Trump will not raise tariffs on Chinese goods during this period,…

Several years of housing market strength has come to a halt.   This was not how it was supposed to be: the housing market has traditionally been one of the main drivers of US growth and particularly strong during periods of booming economic growth. A growing population produces an ever-increasing demand for new units, exacerbated…

Even on his 70th birthday, Prince Charles was overshadowed. The presentation of the Brexit divorce bill – 585 pages long – sucked all the oxygen out of London and Brussels. A detailed and comprehensive agreement; a legal, internationally binding agreement, no matter what the outcome of the ensuing trade negotiations will be. The divorce agreement…

The US midterm elections produced gains for the Democrats, but not the “blue wave” they had been hoping for. Taking control of the House of Representatives was an important achievement, and Republicans were decimated in New England and the Mid-Atlantic region. If Republican incumbent Poliquin lose in Maine’s 2nd district (a new ranked-choice system will…

The US midterm election on 6 November is rapidly approaching. Voting is already under way as most states conduct extensive absentee voting either in person or via posted ballots. Early indications point to a very strong turnout, thus confirming the trend from the primary elections earlier in the year. Turnout could reach the highest level…

In June, when the center-left PSOE gained power in Spain after ousting the conservative PP-government in a no-confidence vote, the new government inherited a booming economy. Spain has recovered from a deep recession, but for the young and long-term unemployed in particular headwinds remain. The fiscal situation has slowly improved, but with the public debt…

Uncertainty remains the only constant in European politics. In Germany, both governing parties are weakened by internal strife and setbacks at the polls. In France, President Macron’s popularity has reached new lows. The Italian government is pushing ahead with its budget plans, despite the EU-Commission’s open hostility. The immigration issue remains unresolved. And above all,…

Where is my umbrella? Unsurprisingly, IMF lowered the projection for global economic growth in its latest World Economic Outlook. IMF’s Managing Director, Christine Lagarde, had already warned about the revised forecast. IMF now assess that “there are clouds on the horizon,” which stands in contrast to the message from April 2018 that “the time to…

Hours before the self-imposed deadline at midnight on 30 September, it was announced that Canada had joined the framework for an updated Nafta-agreement. This was not unexpected. Although pressure publicly had been piled on the Canadian government, President Trump needed Canada onboard to maintain some hope of getting the update through Congress.   The devil…

On 27 September, the Italian government presented the updated budget framework. The event had long been seen as pivotal in the assessment of whether the new populist government would stick to its election promises or abandon pledges once in power as Italian governments regularly have done.   Somewhat surprisingly, financial markets had come to expect…

As widely expected, Federal Reserve on 26 September raised the main policy rate by 0.25% to 2.0-2.25%. The monetary-policy committee, FOMC, did not change anything in the assessment of the economy, but dropped the wording used for year that “The stance of monetary policy remains accommodative.” At the press conference, Chairman Powell emphasized that this…

On 17 September, President Trump took another step in the escalating trade war with China. The US has now added 10% tariffs on additional USD180-200 billion of imported goods from China with effect from 24 September. The tariffs automatically increase to 25% from 1 January 2019, if a deal is not reached before then or…

The US midterm election in November is fast approaching. The primary season is now over, and candidates for federal, state and local offices have been selected. Both parties have seen a surge in voter participation and are fielding a record number of candidates; safe seats preeviously uncontested are now on the line.   Democrats have…

After a hectic and quite substantive campaign, Swedish politics have gone somewhat quiet after the inconclusive election on 9 September. The election was double-inconclusive: it produced a hung parliament with extremely few options for forming a solid governing majority, and the difference between the two traditional blocks was so small that all sides ended up…

The problems in Turkey and Argentina have already been overshadowed in the news headlines by a renewed focus on the escalating trade war between the US and China, with an additional round of US tariffs on Chinese goods likely to be implemented later this month. The Chinese economy is showing signs of slowing with Chinese…

“So it’s an incredible deal. It’s an incredible deal for both parties. Most importantly, it’s an incredible deal for the workers and for the citizens of both countries. Our farmers are going to be so happy. You know, my farmers — the farmers have stuck with me; I said we were going to do this.…

Politicians acting as backseat drivers to monetary policy is nothing new. The independence of the European Central Bank was enshrined in EU-treaties to prevent political interference. The last senior politician to actively attempt to influence policy-making was the German SPD-finance minister Lafontaine in 1998/99. That did not go well. Italian politicians are now making demands…

After a decade of turmoil and bailouts, Greece finally left the 2015-bailout program on 20 August. Greece remains wobbly and fragile with added uncertainty from the Turkish crisis, but the exit is still a milestone.   The milestone would have been more of a festive occasion if it was not for the Italian government and…

On 17 August, credit rating agencies S&P Global Ratings and Moody’s lowered Turkey’s credit rating further into junk (non-investment grade) territory. S&P cited the dire economic outlook as the lira depreciation is set to force through a sharp balance of payment adjustment. The rating was lowered from BB- to B+ with a stable outlook. Moody’s…

On 1 August, US Trade Representative Lighthizer confirmed that the US is considering to raise the tariffs on USD200 billion-worth of imports from China by 25% instead of the initially proposed 10%. The public hearing process has been extended to 5 September, allowing the final list of targeted products to be published by mid-September and…

It is an ironic twist of fate that one of the most ridiculed politicians in the EU, EU-Commission President Jean-Claude Juncker, was hailed as Europe’s strongest card, when he embarked on a mission to Washington to defuse the escalating trade conflict between the US and the EU. President Trump had labelled the EU a “foe”…

At the beginning of 2018, optimism was ubiquitous. A self-sustaining growth cycle finally seemed to be underway thanks to the extremely easy monetary policy in developed countries and moderate commodity prices. The euro area had moved out from the shadows of the euro crisis, and further fiscal stimulus in the US was adding fuel to…

The British prime minister Theresa May has demonstrated remarkable survival skills since her election in August 2016. Navigating between the waring fractions within the Conservative party – hardline Brexiteers and business-aligned Remainers – May has allowed considerable public discourse on every conceivable topic. This year, the lines have been drawn sharper, as the approaching deadline…

The first phase of the bilateral trade conflict with China is now on. Tariffs and counter-tariffs on USD34 billion worth of goods have been implemented with additional USD16 billion following in a couple of weeks. The US is aiming at China’s industrial strategy “Made in China 2025”, while China has hit back at US agriculture…

When the newly elected President Obama started implementing his legislative agenda in 2009, Republicans were met with the message that “Elections have consequences. I won.” With a majority of the popular vote, sky-high approval ratings, a majority in the House of Representatives and a super-majority of 60 votes in the Senate, Democrats could do anything…

When OPEC met on 22 June, the oil-producing countries faced a dilemma. On the one hand, production has declined much more than was agreed in November 2016 (compliance in May was 152% of the agreed cut of 1.2 million barrels a day). On the other hand, the renewed US sanctions against Iran create a delicate…

It has been quite a week A G7-summit that ended in mutual distrust among hitherto close allies. A historic Singapore-summit where North Korea gained much of what it has always wanted. A British prime minister, who again displayed astonishing political survival skills by fending off a rebellion among pro-EU conservatives on the EU (Withdrawal) Bill,…

After two major political summits, market attention is now on the next moves from Federal Reserve (meeting 12-13 June) and the European Central Bank, ECB (meeting 14 June). Both central banks are expected to take further steps in the normalization of monetary policy, but also to highlight the large divergence in economic performance and the…

Trade hardliners regained President Trump’s ear after the surprise announcement two weeks ago of a truce in the trade spats with China. Thursday’s announcement that the US is applying a 25% tariff on steel and 10% on aluminum products from Canada, Mexico and the EU is disheartening, but hardly surprising. Commerce Secretary Ross explained that…

In Italy, M5S/Lega finally completed the long foreplay and agreed to propose a new finance minister, thus removing the road block to a populist government. New prime minister is Guiseppe Conte, but the two party-leaders – Lega’s Salvini and M5S’s Di Maio – are the strongmen behind the scene. Both parties have railed against technocratic…

After days of nervousness, the Italian crisis has snowballed into a much more systemic event. On Tuesday, Italian government yields increased significantly, especially shorter-dated securities. A 6-month auction returned a yield of 1.21% against -0.42% at the previous auction end-April. It was the highest auction yield for this maturity since February 2013. The daily jump…

Italy was thrown into political turmoil after the President Mattarella on Sunday (27 May) rejected the proposed finance minister, Paolo Savona. Savona is an 81-year-old economist with previous government experience but also sharply Eurosceptic. The President reasoned that participation in the euro was a fundamental choice and that an exit should not happen by stealth…

Not much is left of the exuberance about the European economic outlook that was ubiquitous just months ago. The US trade agenda, Russia sanctions and US withdrawal from the Iran-deal have hit European industry particularly hard. Add to that the political uncertainty from Italy, where the new government promises a showdown with the fiscal rules…

On May 18, the United States and China issued a joint statement reporting a breakthrough in the ongoing trade negotiations. Hailed by the US government as a significant victory, the wording in the statement is vague with no firm commitments. The White House economic advisor Larry Kudlow created some confusion by stating that China had…

M5S/Lega government plan calls for tax cuts and additional spending If implemented, fights await with the EU-system and the euro group… …and downgrades of Italy’s credit rating Banks are likely to be hit on several fronts More market turbulence as the government moves forward   Anti-establishment movements can be forces for good, if they represent…

President Trump’s decision to withdraw from the Iran nuclear deal has sent crude oil prices to the highest level since 2014; Brent crude oil is now at USD77 per barrel with the US WTI at USD70.4 per barrel. The withdrawal is not immediate, and the other signatory countries are now working to preserve the deal.…

Hard data confirm a weak spot in the German economy in Q1/2018 Trade tensions are already affecting corporate behavior Growth in German GDP is likely to undershoot rosy forecasts, despite strong households ECB to stay on course with end to QE this year   Global business confidence stabilized in April after declining during winter, but…

The British economy has shown remarkable resilience in the almost two years since the Brexit referendum in June 2016. Export industries have benefitted from a surge in global demand, and households have compensated for a lack of real wage growth by increasing their debt. However, economic growth has tapered off with quarterly growth in 2017…

Brent crude oil prices are now above USD70 per barrel (70 d/b) as regional tensions in the Middle East have increased supply concerns. However, prices have been moving up since last summer, when demand began to outstrip supply, prompting a steep reduction in global inventories. Crude-oil inventories in the OECD-countries (the best proxy for global…

The US economy continues to expand at a moderate pace, although it still exhibits some of the usual Q1 softness (even seasonally adjusted). My GDP-indicator, based on consumer and business confidence, has declined in recent months, but the level still points towards higher growth. Like confidence indicators globally, the surge in late-2017 indicated an increase…

On 3 April, US Trade Representative (USTR) Lighthizer released the list of Chinese goods President Trump plans to hit with a 25% tariff. The list includes 1,300 product categories, totaling about USD50 billion worth of imports. The proposal is now subject to a public hearing running through 22 May. If China has not offered concessions…

On 22 March, President Trump initiated the expected bilateral trade confrontation with China, but almost simultaneously scaled back the simmering trade conflict on steel and aluminum as the EU, Australia, Brazil, Argentina and South Korea gained temporary exception from the tariffs, joining the Nafta-partners Canada and Mexico. Japan is now the odd man out in…

It was all smiles in Brussels on 19 March, when the two chief Brexit negotiators presented a draft withdrawal agreement. The 129-pages document is by no means finished, indeed the text was color coded to highlight the different levels of agreement: green – the text is agreed at negotiators’ level, yellow – policy agreed, but…

When Federal Reserve’s monetary-policy committee (FOMC) meets later this week, it marks the changing of the guard at the helm of the world’s most important central bank. The new chairman Powell is expected to continue on the path laid out by Janet Yellen, but there have been substantial changes to the economic framework since FOMC…

Almost two weeks after the inconclusive election in Italy, the political jockeying is intensifying. On the right, La Lega’s Silvani has claimed the mantle in forming a new government as leader of the largest alliance with 265 seats in the Chamber of Deputies – well short of the majority of 316. Silvani has not softened…

Last Thursday, President Trump announced 25% tariffs on steel and 10% on aluminum. Two days later the President rejected all criticism insisting that for a country like the US, “trade wars are good and easy to win.” On Sunday, trade advisor Navarro said there would be “no country exclusions” and argued that “As soon as…

The resignation of Gary Cohn, National Economic Council director and free-trade defender, confirms that the protectionist wing of President Trump’s Administration has gained the upper hand. With the tax cuts done and nothing major on the legislative agenda, Trump has moved to implement his campaign promises on trade. The resurgence of trade advisor Peter Navarro…

The new Federal Reserve chairman Powell confirmed this week that the global business cycle and larger-than-expected fiscal stimulus has strengthened his assessment of the short-term US growth outlook. Markets responded by increasing the likelihood of four interest rate hikes this year, underscoring the importance of the meeting in March, when the first round of dot-plots…

The combination of tax cuts and spending bills is set to add substantially to the federal debt. Just how much will become visible in the coming weeks, when the Congressional Budget Office publishes a new ten-year budget forecast. It is not going to be pretty. President Trump has unveiled a framework for a big infrastructure…

US inflation does not often attract attention, and the January CPI-inflation report was only interesting because financial markets are desperately searching for signs of accelerating inflation – and a central bank surprise. CPI inflation was a bit higher (2.1%) than expected (1.9%) but did not increase from December. Both food and energy prices increased, but…

After a brief shutdown of the government, the bipartisan spending bill passed the Senate by 71-28 and the House of Representative by 240-186. It now heads to President Trump who has backed the bill. Congress has until 23 March to itemize the agreed spending levels. With the deal, there will be no budget fights on…

Federal Reserve sent a hawkish message at the January meeting, indicating that its assessment of the inflation outlook is firming. Markets have priced in three rate hikes in 2018 reflecting the current dot plot, but I expect upward revisions to all forecasts at the FOMC-meeting in March. Four rate hikes in 2018 should offer temporary…

With France moving in the right direction, the main political risk in the euro area stems from Italy. Parliament was dissolved on 28 December with elections taking place on 4 March. It is the first election under the new election law with a mix of a first-past-the-post system and proportional representation. The center-right alliance is headed…

It is rare that conservative and liberal media agree, but yesterday the headline “Democrats cave” was ubiquitous. On Day 3 of the government shutdown, Democrats accepted a vague promise from Senate Majority Leader Mitch McConnell (R-KY) to hold a floor debate after 8 February on DACA (the legal framework for Dreamers), if an agreement has…

No excitement, but progress In Germany, the SPD party conference yesterday voted to initiate formal government negotiations with the CDU/CSU. The talks could begin immediately and be concluded within weeks. The result then has to be confirmed by the SPD membership in a referendum, allowing for a new government to take office before easter.  …

A week ago, there was bipartisan bliss. Now Washington has once again descended into partisan theatrics. If bipartisan progress had been made on the draft immigration proposal crafted by Senators Durbin (D-IL) and Graham (R-SC), we probably would not have heard about the President’s foul language just yet. Despite all this, Democrats continue to work…

Never a dull moment Those lucky people who spent the first two weeks of the year without Wi-Fi in the Ethiopian highlands or the Amazon jungle have truly missed out on some spectacular Washington fireworks. Many of the events I was expecting later in the year have already materialized, surrealism reached new levels, but there…

Congressional leaders returned to work this week with a full plate of legislative leftovers – and with a Republican majority in the Senate reduced to 51-49 after Democrat Doug Jones was sworn in as the junior senator from Alabama. However, Republicans will need 60 votes in the Senate for everything on the agenda. That means…

Looking ahead at the turn of the year is a favorite pastime for economists. Main scenarios, risks and black swan events are stables on the December festive menu. Does it matter? In some ways no, because the new year is a mere continuation of the old. In others ways it does, because the new year…

Now on to the difficult stuff When the European leaders established that “sufficient progress” had been made on phase 1 of the Brexit negotiations, it marked the end of the beginning of the British withdrawal from the EU. The commitments set out in the Joint Report now have to be fleshed out in the Withdrawal…

The Republican tax reform will be signed by the President this week. The corporate tax is lowered from 35% to 21% with retailers among the big winners. The top individual tax rate is reduced to 37%, but individual tax measures expire in 2026. The repatriation tax rates of 8% and 15.5% are higher than expected.…

When pigs fly, hell freezes over, and Democrats win in Alabama…   Democrat Doug Jones won yesterday’s special Senate election in deep-red Alabama by 50-48% over controversial Republican Roy Moore. Jones not only won big among black voters and in the big cities, but also flipped more rural and especially suburban counties. The turnout among…

The Brexit debacle this week not only signals trouble in closing phase 1 of the negotiations, but also points to the fundamental problem of Brexit: What is the relationship between the EU and the UK going to look like after March 2019? For the EU it made perfect sense to divide the negotiations into two…

In the end, the Republican resolve to lower taxes beat whatever concerns individual members had about process and debt. Senator McCain came onboard Thursday, and the last holdouts got what they needed Friday: Daines and Johnson got additional tax relief for small businesses, Collins got assurances on health care and Flake on migration. Senator Corker…

Senate Majority leader Mitch McConnell Thursday night postponed a vote on the long-anticipated tax reform. After a week of strong momentum – even John McCain now favors the bill – the efforts stalled when the Joint Committee on Taxation (JCT) issued its assessment of the package. Major changes to the tax proposal are now in…

After weeks of negotiations and missing several self-imposed deadlines, the liberal FDP last night walked out of the coalition negotiations with the CDU/CSU and Greens. Citing a lack of trust between the parties, FDP-leader Lindner saw no reason to continue, ”No government is better than bad government”. Not surprisingly, the blame game is well under…

Congressional Republicans yesterday moved forward on tax reform. The House of Representatives passed the tax bill with 227 votes – all Democrats and 13 Republicans voted against. However, it was a much more comfortable margin than would have been expected a couple of weeks ago. The process is far from over, but House Republicans were…

The European economy displayed impressive strength in Q3 with growth rates in both the euro area and surrounding countries exceeding expectations and running at multi-year highs. Euro area GDP grew by 0.6% q/q (confirming flash estimate) and 2.5% annually in Q3. It is the highest growth since 2011, and was carried by an acceleration across…

Democrats won crushing victories in yesterday’s off-year elections in the Commonwealth of Virginia sending a strong message to both Democrats and Republicans in Washington. The Democratic gubernatorial candidate Ralph Northam beat Republican Ed Gillespie by a comfortable 54 to 45 margin. Both belong to the establishment wing of their parties and both ran mean-spirited campaigns.…

The 8th of November 2016 was a beautiful day in Washington DC. People queued to vote and anticipation was running high. Hillary signs everywhere. It was difficult to find anyone who even remotely thought this could go… wrong. New sophisticated exit polling showed healthy Clinton leads in battleground states throughout the day.   But it…

Key takeaway The October job report restores order to the job data, but also highlight the lack of wage inflation. Federal Reserve is set to hike interest rates in December, and this report does not change that.   Hurricane impact erased The October job report reversed some of the hurricane-induced weakness in September with a…

Once upon a time when I was a diplomat in Washington DC (2003-06), Democrats and Republicans almost agreed on a major tax reform. The sticking was that Republicans insisted on budget neutrality – no net effect on the budget balance – while Democrats wanted to generate additional revenue. The proposal put forward yesterday by Kevin…

The noise from the White House and Washington can be deafening at times. Erratic and confrontational, President Trump has lashed out at friends and foes creating continued confusion about both domestic and foreign policy. However, one area stands out as a sea of relative calm: Many of President Trump’s nominations to important positions have been…

As the clock is ticking, one would expect negotiations between the EU and the UK to speed up. Instead they have come to a halt with the British government now trying to change the format while conducting direct bilateral talks with EU capitals. In London, there is little sign of clarity. PM May has the…

The EU-Commission’s Economic Sentiment Indicator (ESI) showed another increase in October from 113.2 to 114. This is the highest level since 2000, surpassing the optimism in the years prior to the financial crisis. For the euro area as a whole, there were increases in all subcomponents with construction increasing the most during the last year.…

US economic data continues to impress. GDP grew by 3.0% q/q (annualized) in Q3 despite a negative impact from hurricanes. I had expected 2.5% quarterly growth, but the large positive contribution from inventories (0.7pp) pushed up the overall growth rate more than I had expected. This could be reversed in Q4. While the loss of…

Fly on the wings of doves In a major victory for ECB’s dovish camp, the European central bank decided today to extend the bond purchase program until the end of September 2018, at a reduced pace of EUR30 billion per month. Moreover, the ECB kept the dovish wording in the press release promising to extend…

Austin growing up Arriving in Austin, Texas from Washington, DC is always a study in similarities and differences; both green and leafy. Each city has sturdy economic and population growth, and both are liberal cities; Austin not as much as DC, but is still “the blueberry in the red Texan sea”. Both Austin and DC have…

Washington is a difficult nut to crack. 94% of the locals voted for Hillary Clinton and are unified in their condemnation of what is going on in the Trump White House. Moderate Republicans meet questions with a stiff upper lip and hopes for the best. Trade organizations and think tanks all have agendas – some…

The noise level in Washington remains painfully high with frequent presidential Twitter storms attacking friends and foes. But on trade – where much action was expected – it has been rather calm. Yes, Canadian softwood lumber producers have been hit by preliminary tariffs – as has Bombardier recently. But these cases have been handled within…

On 5 October, Randal Quarles was confirmed by the Senate to fill one of the four vacancies on the Federal Reserve Board. Quarles was nominated for the vice chair in charge of financial regulation and is likely to push for more deregulation. To highlight that financial regulation is a focus area for the Administration, the…

Key takeaway: The noisy and contradictory September job report is not going to keep the Federal Reserve from increasing rates in December. The pickup in wage growth must have surprised most members of the monetary-policy committee (FOMC): is this a sign that Yellen wage “mystery” is going away? It is too soon to jump to…

What a difference a year makes! At the Conservative Party Conference last year, a confident PM May spooked markets by confirming that the UK was not seeking any of the various soft Brexit options that were floated by Remainers, but was indeed seeking to restore full and complete independence: “But let’s state one thing loud…

Republican leaders from the White House and Congress on 28 September introduced the much-anticipated unified framework for tax reform. The nine-page framework comes after weeks of discussion and is successor to the one-page proposal the White House introduced in April. However, stripping out the buzzwords, it is really still just one page long and contains…

The German election was a disaster for the center-left SPD and a setback for the conservative CDU/CSU and Chancellor Merkel. The governing coalition’s loss of 14 percentage points comes at a time when economic confidence is at its highest in more than 20 years. A full 84% of voters think that economic conditions are good…