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AI, Fed and Inflation and Disinflation Risks
February 26, 2026 8:24 AM UTC
• Existing Fed officials and Fed chair designate Warsh have divergent views on the impact of AI in boosting productivity and whether this means lower inflation/policy rates or high business investment/electricity prices argues against lower policy rates and potentially meaning a higher shor
Swiss SNB Preview (Mar 19): Keeping a Low Profile
March 10, 2026 11:53 AM UTC
Once again and in line with consensus thinking we see SNB policy being unchanged when it gives its next quarterly assessment with little shift in the forecast for either growth or inflation. Admittedly, the tone of the economic outlook will be more guarded but where it will be underscored that it
2025 Q4 Country Insights Scores to Download in Excel
March 3, 2026 10:00 AM UTC
The Country Insights Model is a comprehensive quantitative tool for assessing country and sovereign risk by measuring a country’s risk of external and domestic financial shocks and its ability to grow. The access to our full range of scores across 174 countries corresponding to the fourth quarter
Markets and the Iran War
March 4, 2026 9:50 AM UTC
• The Trump administration’s objective appears to be pivoting from regime change to hurting Iran ballistic missile capabilities, which argues for a 2-4 week war rather than a prolonged war. However, the most intense missile battles will likely occur in the next one week and markets are
Sweden Riksbank Preview (Mar 19): On Hold and Still For Some Time Ahead?
March 10, 2026 10:56 AM UTC
It is highly likely that the Riksbank will (again) keep policy on hold with the key rate left at 1.75% when it gives its next verdict. However, what will be more important is what the Board says; explicitly in terms of the recent (less pleasing to it) data flow and, implicitly in terms of updated
Iran: What Length For War?
March 2, 2026 7:44 AM UTC
· If the war is short (ie 1-2 weeks) and leads to a ceasefire then the global economic impact will be small, with the greatest impact in the middle east of oil/gas supplies on a temporary basis and tourism. If the war is more prolonged (ie months) then oil/gas supplies could be sque
Iran War Scenarios
March 11, 2026 9:45 AM UTC
· Our central scenario (75%) remains a multi-week war in Iran. Trump loathing of long wars and high gasoline prices prompts U.S. to declare victory before end of March. Israel and Iran would most likely agree an effective ceasefire. The ceasefire would be fragile, however, as it w
ECB Preview (Mar 19): No Longer in a Good Place?
March 11, 2026 2:53 PM UTC
With no change in policy expected, what the ECB says is the most important aspect of the ECB meeting next week, both explicitly and implicitly via its updated forecasts (Figure 1). Both are likely to underscore that rate hikes are certainly possible if the almost inevitable inflation rise proves t
Iran: Limited U.S. Attack?
February 24, 2026 10:00 AM UTC
· Iran authorities appear reluctant to meet the Trump administration’s demand to stop nuclear fuel production for potential weapons. This increases the odds of a limited attack by the U.S. on Iran to 30-40% (Figure 1), which could occur as soon as this weekend. The most likely I
Reciprocal Tariffs: Supreme Court Strike Down
February 20, 2026 4:31 PM UTC
· The 6-3 vote by the Supreme court and full ruling against reciprocal tariffs means that the Trump administration will likely resort to other tariffs for negotiating leverage. However, the Trump administration will also pressure to codify existing trade framework deals that have be
ECB Review: Not Such a Good Place!
March 19, 2026 2:49 PM UTC
With no change in policy expected and this being delivered unanimously, the ECB underlined its determination to ensure that inflation stabilises at the 2% target in the medium term. Unsurprisingly, it stressed how the Middle East conflict has made the outlook significantly more uncertain, creating u
Trump Visit To China: Trade/Taiwan and Iran
March 12, 2026 11:37 AM UTC
• The main success of Trump’s visit will be on trade, where an extension of October trade truce is likely. China wants to avoid section 301 tariffs that could increase the current effective tariff of 25% and the U.S. will turn the whole visit into a PR victory for Trump to deflect from
BoE Review: A Fragile MPC Truce?
March 19, 2026 12:59 PM UTC
Very clearly, the BoE kept rates on hold with no dissents as it understandably waits for more information about the length, breadth and repercussions of the Iran war. The individual MPC member statements (as expected) showed diverging views as to the extent and reaction of what are now unfolding r
Sweden Riksbank Review: On Hold and More Likely Still For Some Time
March 19, 2026 9:26 AM UTC
Surprising hardly anyone, the Riksbank (again) kept policy on hold with the key rate left at 1.75% it latest verdict. However, what was more important was if and how the Board changed its rhetoric. In this regard, it repeated its assertion of no change for some time to come but qualified it some
Trump’s Fiscal Dominance
March 10, 2026 10:35 AM UTC
· Voting will be done by 12 FOMC members and while Kevin Warsh could mellow some centrists, 5 district Fed presidents and Barr/Jefferson are at the Fed until at least 2031. Warsh may merely bring interest rate cuts sooner from June or potentially engineer a small dip below the 3% neutra
UK CPI Preview (Mar 25): The Calm Before the Storm?
March 17, 2026 8:53 AM UTC
Although most aspects of the January CPI came in a notch above BoE thinking, there was still a clear fall even in the core rate. Indeed, the headline CPI rate fell from December’s 3.4% to 3.0% (a 10-mth low) and we see it staying there is February’s numbers - as do BoE projections. Services
U.S. February CPI - Core rate has slowed, but inflation not yet defeated
March 11, 2026 1:00 PM UTC
February CPI is in line with expectations at 0.3% overall, 0.2% ex food and energy, with the respective gains before rounding being 0.267% and a reasonably subdued 0.216%. Yr/yr rates are unchanged at 2.4% overall and 2.5% ex food and energy. The data is not alarming but inflationary pressures remai
Bank of Canada - Uncertainty Heightened Further but a Dovish Leaning
March 18, 2026 3:17 PM UTC
The Bank of Canada left rates at 2.25% as expected, but with uncertainty heightened still further removed from its statement a reference to the current policy being appropriate provided the economy evolves as expected. Uncertainty on policy has increased too. However, the BoC has taken a more dovish
U.S. Q4 GDP revised down, Savings revised up, Core PCE Prices make a strong start to 2026
March 13, 2026 1:31 PM UTC
The latest US data is mostly on the weak side of expectations, most notably a broad based downward revision to Q4 GDP to 0.7% from 1.4%. January personal income, personal spending and core PCE prices all rose by 0.4%, net close to expectations, though upward revisions to savings reduce downside cons
China: Modest Bounce at Start of 2026, But
March 16, 2026 8:49 AM UTC
· Though the January-February data was better than expected, we expect high oil prices and an adverse effect from the Iran war to hurt China’s export growth. We still feel that the economy remains too dependent on high tech manufacturing and modest consumption will act as a drag on
Gulf Countries U.S. Investment Deals Risks
March 9, 2026 8:05 AM UTC
· Lower budget revenue and a multi-year hit to tourism and the Gulf role as air transit hubs, could see delays and reduction in some parts of the Gulf states USD3.4 trillion deals with the Trump administration. The economic effects on the U.S. would likely be small and the geopolitics b
U.S. February Employment - Decline follows an above trend January, trend near flat
March 6, 2026 2:24 PM UTC
February’s non-non-farm payroll with a 92k decline is well below expectations but needs to be seen alongside a 126k increase in January, and in the context of bad weather between the two surveys. Unemployment edged up to 4.4% from 4.3% though more positive are a 0.4% rise in average hourly earning
