Archive

July 01, 2024
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HEM: Doves Stay the Course

  • The dovish BoE seems too desperate to cut in August
  • Another ECB cut in Sep relies on the Fed starting then
  • Excessive labour cost growth is being overly discounted
  • Premature stimulus can blow bubbles like in 1998
  • We still see a risk of rate hikes in 2025 to reverse cuts
June 03, 2024
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HEM: Policy Blowing Bubbles

  • Rate cuts appear close: ECB in June and BoE in August
  • Further cuts depend on the Fed starting in September
  • Excessive labour cost growth is sustaining inflation
  • Premature stimulus can blow bubbles like in 1998
  • We see a risk of rate hikes in 2025 to reverse cuts
May 01, 2024
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HEM: Molting Hawk Feathers

  • Rolling rate cuts have flattened the front end enough
  • Hikes are unlikely despite limited cuts coming later
  • Market pricing may overshoot before we become dovish
  • Our Nov-24 BoE call is still slightly later than priced
  • A Fed delay beyond Sep would slow ECB cuts after June
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

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