Archive

April 08, 2024
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HEM: Rolling Precariously

  • Data are resilient, but markets doubt the policy effect
  • Rising unemployment would signal a need for rate cuts
  • UK wage settlements support a high floor in inflation
  • Excess demand and inflation delay BoE cuts to Feb-25
  • The Fed and ECB may only delay to Sep-24
March 04, 2024
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HEM: Reality Rolling Doves

  • Resilient data keeps rolling back dovish pricing
  • Rates do not seem tight enough to require deep cuts
  • UK wage growth is too high for import prices to offset
  • Excess demand and inflation delay BoE cuts to Feb-25
  • The ECB may only delay to Sep-24, closer to the Fed
February 05, 2024
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HEM: Dovish Dreams Decaying

  • Cut pricing should keep rolling later without weak data
  • Resilient activity suggests rates are not that tight
  • Wage growth is too high for import prices to offset
  • The Fed can cut in June ahead of the ECB in September
  • Structural issues still delay our BoE call until Feb-25
January 08, 2024
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HEM: Fading Silly Season

  • Markets herded prices higher without fundamental news
  • Wage growth remains inconsistent with inflation targets
  • UK persistence is more structural than cyclical
  • High wage settlements should delay BoE cuts until 2025
  • Underlying EA inflation allows an ECB cut this summer

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