US | Biden’s American Jobs Plan will provide a structural lift
After spending over $5tn in cumulative cyclical fiscal relief, Congress is now contemplating President Joe Biden’s structural stimulus package worth $2.7tn in infrastructure, manufacturing, and health care outlays, as well as tax credits for housing and green energy investments.
What you will learn:
- The structural nature of this plan would generate a more gradual fiscal impulse than prior coronavirus relief packages and would lift long-term potential output by 0.1%.
- In the short term, the impetus from stronger government outlays will be tempered by higher taxes on corporations.
- We estimate the AJP would create 1 million additional jobs in 2022 and 2 million by the end of 2024.
High debt costs suggest European office price correction
Our analysis suggests a 10% correction is needed on average for the major office markets in Europe to compensate for the higher cost of debt, with prime yields required to soften by 10bps-75bps to generate a low-risk interest coverage ratio at a reasonable LTV.Find Out More
Why an ageing population doesn’t mean soaring inflation
What’s the future for inflation? Joachim Nagel, the new president of Germany's central bank, believes the rapidly ageing global population will play a key role – ramping up pressure on prices in the medium term. While we agree slowing labour supply will stifle output growth, in his recent discussion Nagel failed to fully consider the demand side of the argument.Find Out More