Economist. Strategist. Global Fixed Income PM. Likes analysis and Arsenal. Dislikes Brexit, bond bears and inflationistas. Tweets are purely my own views.
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Jul 2, 2019 • 17 tweets • 3 min read
I have mixed feelings about Lagarde replacing Draghi, which puts me on the decidedly optimistic side of opinion on this matter. (Apologies, long threat ahead.) To start with the negative, the big drawback is that Lagarde is not an economist. 1/
This can matter a great deal. The head of a central bank might need to face down opposition from their own policy board and politicians in order to do what is necessary, and having the conviction borne of a robust economic framework can help. 2/
Jun 25, 2019 • 15 tweets • 3 min read
The BOJ is poised to join the Fed & ECB in easing monetary policy. The nature of the ease might surprise, as the BOJ has to overcome the self-imposed constraint of its Yield Curve Control regime, that monstrosity that biases policy to be pro-cyclical. 1/
The background to an ease is fairly simple: inflation is nowhere near Kuroda’s goal of above 2% for a period of time, growth going in the wrong direction, and a likely recession inducing consumption tax hike is set to be enacted in October. 2/
Apr 3, 2019 • 6 tweets • 1 min read
The discussion of the Brexit end state is an example of the Overton window in operation, and how a steady stream of unfounded economic projections and fact-lite debate has served to normalise the extreme.
This is evident in the push for a Customs Union as a softer alternative to PM May’s plan. Aside from the fact that it could only be an add-on to her deal given that a Customs Union does not atisfy the needs of the Good Friday Agreement…
Mar 25, 2019 • 17 tweets • 4 min read
To take my mind off Brexit, I thought I’d have a long overdue rant on a topic that always irks me: term premium in interest rate markets, or more specifically the misuse of the term. 1/
In recent years it has been all too common to hear talk of people positioning for a bearish steepening of the UST curve based on the need for “a reintroduction of term premium into the market”. 2/
Jan 8, 2019 • 17 tweets • 4 min read
A thread on the US neutral Fed Funds, and more specifically my two-fold concern that I may have over-estimated it’s level, and how it may decline once again over the coming 12-18 months, with natural implications for UST directionality. 1/
To address the obvious first – why focus on the neutral rate when the Fed says that it is unknowable in advance? The reason is that the neutral rate has mattered a great deal for the UST curve since the mid-1990 and is a lodestar for analysing US rates. 2/
Aug 22, 2018 • 19 tweets • 4 min read
A thread on Brexit. I retain the uncontroversial assumption that Brexit is an act of supreme economic, geo-political and societal self-harm. Here I focus on my concern that no-deal Brexit risks may be under-analysed and under-priced in the market. 1/
To start with the former gripe, I would characterise much Brexit analysis in the market as a case of “relax, it will be OK”. It reminds me of 2008 when all too many people belatedly realised that they needed to understand money markets. 2/
Aug 13, 2018 • 14 tweets • 3 min read
One rant I’ve been meaning to have for a while concerns the idea that US monetary conditions remain extremely accommodative. (Warning, incoming thread)) 1/
This conclusion tends to be based on the traditional use of financial conditions indices, which are the analytical equivalent of a chocolate teapot/ Arsenal central defender. 2/
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