Thoughts – Insights

A rebellion by almost one quarter of a governing party is painful, but it need not be terminal for the leadership. Tony Blair faced similar mathematical pain in the Iraq War vote of 18th March 2003 and yet he and his policies marched on regardless. Indeed Boris might simply think this is all a repeat of the…

1. The Fed On Wednesday, we already know Powell will announce an accelerated taper and we already know the beleaguered dot plot will signal at least a couple of hikes next year and even more in the years after that. This isn’t “hawkish” as much as it’s hitting the red button marked “the Covid emergency is over…

The path ahead is quite clear: A vaccine-evading variant will emerge This dawning realisation will impair the velocity of people Policymaker division will stymie any fiscal response The inflation obsession will see tighter monetary policy By the time the authorities understand the hit to economic growth, their intervention will be too late Risky assets will…

1. Omicron We won’t know the truth about Omicron’s vaccine evasion or deadliness for some time, but that doesn’t matter. The mathematics, the politics and human behaviour mean its negative impact on economic growth is a certainty. As we explained in our note from 8th July, “Hoping for the best, Preparing for the worst”: ‘the…

1. The Fed Clarida flexed his hawkish feathers with Friday’s comment that “it may well be appropriate at [the December] meeting to have a discussion about increasing the pace at which we’re reducing our balance sheet”. But, if we can channel Mandy Rice-Davies for a moment, he would say that, wouldn’t he? The clock is ticking on…