This week’s US gross domestic product (GDP) data paints a bright picture for the second quarter and a less gloomy first-quarter decline than first published. As impressive as the rebound looks on the surface, we think it’s still understated.
A first-quarter productivity slump fueled concerns about the US economy, but second-quarter labor and company earnings data indicate better productivity and underlying growth. In short, the data point to a US economic cycle that’s broader and stronger than it appears on the surface. (more…)
Asia’s three biggest economies—China, India and Japan—are carrying out reform programs. Taken individually, these may do little to excite investors’ imaginations, but taken together, they become much more interesting.
This week, the European Central Bank (ECB) announced a bigger and broader package of stimulus measures than anyone anticipated. But don’t hold your breath for a material near-term boost to growth or inflation in the region. (more…)
Darren Williams (pictured) and Dennis Shen
When Mario Draghi pledged to do “whatever it takes” to save the euro in July 2012, nobody expected things to change so quickly. Peripheral bond markets have since turned around sharply, supporting the European economic recovery. But can the improvements be sustained after countries exit their bailouts? (more…)
As the drama of the political showdown over embattled Ukraine plays out, bond investors face less-publicized concerns over the fate of their Ukrainian investments and a potential bailout. But a bailout may not be all good news for investors.
Joseph G. Carson (pictured) and Darren Williams
Evolving economic challenges are transforming central banking around the world. The new monetary-policy doctrine is likely to put greater emphasis on asset-price developments. But, without a true monetary anchor, central banks could still risk a repeat of the recent boom/bust cycle. (more…)
Recoveries from past financially driven recessions have tended to be slow, and so far the current US recovery is following that pattern. But abundant liquidity and fading headwinds suggest to us that growth is likely to accelerate. (more…)
The Bank of England appears to have moved the goalposts. After 30 years of focusing almost exclusively on inflation, monetary policy is now being more explicitly directed toward generating faster growth and lower unemployment. (more…)
Expectations are high that President Xi Jinping and Premier Li Keqiang, nearly one year into their likely 10-year reign, will unveil reform policies that will define China’s social and economic development over the next decade and beyond. After the proposals are made public, the new leaders must prove that they can implement substantial change without derailing the growth of the world’s second-largest economy. (more…)