Daily update
Daily update
- Equity markets exhibited some volatility yesterday. This is not the fault of economists (there was no news of any economic note). The nature of the moves are unlikely to offer any economic signals either.
- The US offers the first guess at second quarter GDP growth. It is increasingly likely that GDP fails to capture all of the modern economy—a statistic created a century ago in the era of flappers and Al Capone is struggling to include TikTok content and side-hustles. Revisions matter to the policy narrative even if markets downplay them. The deflator should signal fading inflation pressures.
- China’s central bank cut another interest rate (a medium-term rate that has traditionally been less significant). Again, this is a signal of policymakers’ concern about lethargic domestic demand. Domestic consumption is unlikely to be constrained by either the cost of capital or the return on savings, which limits the direct stimulus effect of such a move.
- The German ifo sentiment survey is due. ECB President Lagarde is also speaking (at an event in Paris, coincidentally right before the Olympic Games opens). Lagarde is not attending the finance minister / central banker G20 gathering. The relevance of the taxpayer-financed G20 jamboree—with or without Lagarde—is perhaps questionable.
