May 03, 2023
HEM: Tighter For Longer
- Excess demand decays slowly through flat activity
- Underlying inflation is not breaking back to target
- BoE hikes in May and June may be followed in August
- The ECB’s problem is less bad, but it has further to go
- Persistence of past policy will discourage future cuts
April 04, 2023
HEM: Unbroken Excesses
- Bank failures haven’t ended resilient excess demand
- Underlying inflation remains excessive
- We expect another BoE 25bps rate hike in May
- The ECB probably has at least another two hikes left
- Rate cuts can wait until policy success is clear in 2024
March 01, 2023
HEM: Rejuvenated Hiking
- Resilient activity stops cyclical excesses from ending
- Underlying inflation is inconsistent with targets
- Hikes can’t stop until excess resilience is broken
- Multiple BoE and ECB rate hikes remain likely
- Stimulus can wait until 2024, then be aggressive
February 06, 2023
HEM: The Hike Isn’t Over Yet
- Resilient activity stops cyclical excesses from ending
- Underlying inflation is too high despite CPI slowing
- BoE hikes are under-priced as it asserts its credibility
- ECB hikes should extend with the cycle beyond March
- Market desire for a policy victory does not make it so
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