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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
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
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
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
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
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 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
UK CPI Review: Fresh and Marked Fall Resumes as Core Slips to Cycle-Low?
February 18, 2026 10:03 AM UTC
Although most aspects of the January CPI came in a notch above BoE thinking, the clear fall in the headline rate and further looser labor market messages still point to a BoE rate cut next month, not least given the likely return to the 2% target by April. These projected falls started with these Ja
Warsh, AI and Lower Policy Rate?
February 16, 2026 10:55 AM UTC
· Warsh will find it tricky to convince FOMC members that AI is currently boosting productivity and acting as a disinflationary force. However, Warsh could also try to get the Fed to be more forward looking and less data dependent, which could add some proactivity into Fed debates. Fo
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
EZ HICP Review: Core Rate Spikes as Upside Inflation Risks Return
March 3, 2026 10:35 AM UTC
Having dropped to 1.7% in the January data, thereby matching expectations and the short-lived Sep 24 outcome, it is likely especially in view of the Middle East conflict that the headline HICP rate may not be any lower through this year and into next. Indeed, we headline rate rose 0.2 ppt to 1.9%
GBP: Foreign Investor Flows
February 23, 2026 11:05 AM UTC
· Inbound inflows into the UK have been solid in the last few years attracted by yield pick-up and fiscal consolidation for gilts and cheap comparable valuations in UK equities. UK BOP data suggests something would have to go really wrong to stop inbound portfolio flows e.g. UK recessio
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
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
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
UK GDP Preview (Mar 13): Were Things Getting Better?
March 4, 2026 11:11 AM UTC
Belatedly, some good news; the UK economy grew for a second successive month in December, something not seen for almost a year. Even more encouragingly, it may very well enjoy a further rise in the looming January data, thereby providing the best three-month showing in two years. But as is famil
Canada Q4 GDP slips despite strong support from government, but some positive signals
February 27, 2026 2:32 PM UTC
Canada’s 0.6% annualized Q4 GDP decline was slightly weaker than expected and further below a flat BoC projection, and came despite quite strong support from government. Q3 was revised down to 2.4% from 2.6% but this was more than outweighed by an upward revision to Q2 to -0.9% from -1.8%.
China: Housing Not Bottomed Yet
February 25, 2026 10:55 AM UTC
• We do not feel that China residential property market has bottomed, as it faces two cyclical and two structural headwinds. Cyclically outstanding inventory of complete houses remains high, while households are also suffering from low income and employment growth. Structurally populati
FOMC Minutes: Shows Splits, But Rate Cuts Should Still Arrive
February 19, 2026 9:24 AM UTC
· The January FOMC minutes show a split Fed, with some sounding mildly hawkish. However, the district Fed presidents are on the mildly hawkish side, but most are non-voters and we feel that the FOMC voting consensus is more neutral. Additionally, we feel that Fed is too upbeat on th