US Executive Podcast – June 2021
Gregory Daco, Chief US Economist, and Lydia Boussour, Lead US Economist, discuss how the latest economic data point to a summer boom with supply gradually responding to stronger demand. While retail sales were softer than expected in May, the report fails to capture the ongoing consumer spending rotation into services. Meanwhile, industrial activity remains on a solid path, despite supply bottlenecks. They also discuss the Fed’s pivot away from its extremely accommodative stance, with more sanguine economic forecasts and a revised median interest rate ‘dot plot’ showing two rate hikes in 2023. With the Fed now actively discussing QE tapering, we continue to expect a formal announcement in August with tapering starting early next year, followed by two hikes in 2023.
Is sterling in the midst of a sell-off or a full-blown crisis?
Policy announcements are coming thick and fast in the UK at the moment and have been greeted with the most significant sell-off in UK assets in decades. Is this a case of markets overreacting or have the UK public finances been put on an unsustainable footing? Will the Bank of England react to the fall in sterling or are markets setting themselves up to be disappointed? We will set out our views on all these topics and set out the conditions under which we think this volatility will subside.Find Out More
Pre-emptive debt restructuring: a viable scenario for fragile African sovereigns?
The expiry of Covid-19-related support coupled with a surge in the goods import bill has exacerbated pressure on external trade positions for various African sovereigns. We see headwinds intensifying from 2023 onwards in the form of a deepening drought in East Africa, populist-leaning policies aimed at appeasing voter frustrations, large redemptions of external public debt facilities, and moral hazard. The risk profile is fragmented but a common thread can be found across Africa: sovereigns face an uphill battle in meeting the projected external funding requirements. With the risks of disorderly default on the rise and informed by the Zambian blueprint, we investigate the case for pre-emptive debt restructuring for fiscally fragile nations including Egypt, Ghana, and Kenya.Find Out More