Archive

July 04, 2023
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HEM: Icarus Policy Spreads

  • UK surprises are more divergent than the data
  • Expectations have woken up to second-round effects
  • More policy tightening is needed to break excesses
  • BoE pricing has flown too high relative to the Fed
  • Hyperactive data dependence can swing both ways
June 05, 2023
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HEM: Persistence Matters

  • Avoiding recession prolongs problematic excesses
  • Second round effects are especially bad in the UK
  • We expect two more ECB and BoE hikes (upside risks)
  • The BoE-Fed spread may have gone too far in 2023
  • Tightness should extend by being slow to cut rates

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