September 04, 2023
HEM: Cuts Can Wait for Godot
- The BoE-Fed “Icarus Spread” has melted further
- Disinflation is not yet on course to meet targets
- Wage growth pushes BoE hikes as the ECB pauses
- Policy doesn’t look too tight amid resilient activity
- High neutral rates mean cuts can roll later
August 07, 2023
HEM: Persistent Policy Peaks
- The BoE-Fed “Icarus Spread” has crashed to earth
- UK excess is less special outside wage settlements
- BoE hikes have further to go, but the ECB may pause
- Resilient activity data don’t justify turning looser
- Global rate cuts will be slow to a high neutral level
July 04, 2023
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
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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