21 March 2019 At its March meeting, the US Federal Reserve signaled it would keep interest rates unchanged in 2019. In a similar fashion, the European Central Bank (ECB) at its recent gathering signaled interest rate hikes will be delayed until next year, and additional monetary support was forthcoming. But, that's not the end of [...]
22 February 2019 Last year's Turkish financial market crisis emanated from the confluence of several domestic and international factors. To be sure, Turkey is no stranger to boom-bust economic cycles. And, fueled by overly expansive macroeconomic policies, the Turkish economy was overheating and inflation rising sharply by mid-2018. Against this already challenging backdrop, the Erdogan [...]
23 January 2019 One of the unintended, albeit unsurprising, consequences of the current period of ultra-loose monetary conditions has been the extraordinary buildup in debt worldwide. The top Chart illustrates that during the previous business cycle global debt had remained stable at what seemed an elevated level of 80% of GDP. In the aftermath of [...]
10 August 2018 In the wake of the turmoil in Turkey, markets are considering which Emerging Market currencies potentially could be vulnerable if a broader EM contagion develops. A couple of my favourite Charts may provide some clues. What has provoked the dramatic run on the Turkish lira? Chart 1 illustrates the Turkish currency was [...]