Daily update
Daily update
- China cut its one year loan prime rate, but less than markets had anticipated. For those bewildered by the plethora of policy tweaks in China, it is best to look at the bigger picture. China is easing policy, but the focus may be on supporting rather than stimulating consumption—lowering costs for existing borrowers more than encouraging stronger credit growth.
- German July producer price inflation is expected to record year-over-year deflation. Remember this measure says as much about the level of prices a year ago as it does about the level of prices today, but the general trend is for reduced inflation pressures.
- Central bank policy is in focus ahead of this week’s Federal Reserve Jackson Hole summer camp. Will we get profound insights into economic philosophy from Fed Chair Powell or ECB President Lagarde, between intervals of roasting marshmallows on the camp fire? It seems unlikely.
- China is reported to want to establish an emerging market multinational group to rival the G7. Aside from questioning whether large multinational gatherings serve any purpose (would anyone care if the G20 were abolished?), there is a larger challenge. Structural upheaval in the global economy will encourage scapegoat economics, prejudice politics, and economic nationalism. That increasingly challenges collaboration.
