Archive

February 17, 2025
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US vs EU Part 3: Russia/Ukraine

  • The commentariat’s misreading of last week’s Trump/Putin phone exchange accounts in part for why markets have now got ahead of the curve on Russia/Ukraine. As long as Europe’s leaders stay in denial over transatlantic relations, investors’ watchwords should remain ‘caveat emptor’.

By Alastair Newton

February 11, 2025
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Neutral Rates Are Shifting Sands

  • Central banks provide vague and evolving estimates of neutral rates that are unreliable guides to policy decisions, although these estimates inform the perceived terminal rate.
  • Resilient labour markets and persistent unit labour cost growth challenge the dovish view that policy rates are well above their neutral settings, urging caution.
  • Neutral estimates gradually drift to explain the prevailing regime, which doesn’t prevent a pause in cuts or a return to rate hikes consistent with historical norms.

By Philip Rush

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