Archive

March 04, 2024
2024-03-04 HEM_head.png

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
2024-02-05 HEM_head.png

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
2024-01-08 HEM_head.png

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
December 04, 2023
hem_head2.png

HEM: Persistence Underpriced

  • Rate cuts may come next but need not start soon
  • Excessive wages raise inflation and activity resilience
  • UK persistence is more structural than cyclical
  • The BoE can wait until 2025 even if the ECB cuts in July
  • Market pricing has become too dovish

By country