Macroeconomic Turbulence #1 June 2023
Energy Transition and Industrial PolicyIndustrial policy is once again at the center of economic policy debates. This reflects both the consequences of the pandemic and the lack of room for…
Philippe Waechter's blog
The ECB new strategy
The ECB is changing course. With its interest rate hike scheduled for 21 July, the ECB is putting an end to a long period of very low and stable interest…
The Federal Reserve takes over
At its January 25-26 meeting, the US central bank confirmed that it would raise interest rates as of its mid-March meeting. Above all, it indicated that very soon after it…
Central banks that adapt but do not create movement
At the central bank meetings this week, the change in tone and the measures announced have essentially reflected the end of macroeconomic catching-up. GDP has converged to a level equivalent…
US stimulus, rising rates, the dollar and the euro area
With US yields rising, the rest of the world follows in their wake.This surge is driven by two factors: 1 – the swift upturn in oil prices, which translate expectations of…
From Today to Tomorrow – January 14 – The matter of public debt
Swiftly expanding public debt to support macroeconomic adjustment is entirely warranted to tackle the pandemic, and this process is facilitated by mammoth intervention from the central banks. Meanwhile, low interest…
From Yesterday to Today – October 21 – The widening interest rate spread between the US and the Euro zone
The 10-year interest rates in the USA and in the Euro zone now look divergent. The rate differential has widened by 20 to 30 basis points between the US and…
From Yesterday to Today – October 16 – Low interest rates for an extended period before inflation
Low interest rates reflect the combination of fiscal and monetary policies. This is already translating into severe financial repression. Governments, more than central banks, will have an interest in a…