The Financial Times (“Crafting a fiscal policy fit for all seasons” FT View, January 14) has admitted that it was wrong to advocate “fiscal retrenchment” after the 2008 financial crisis. It now supports “a looser fiscal approach”. It writes that “sensible economists” change their minds when the facts change. The facts have not changed; the… Continue reading Letter: The FT and its ‘mea culpa’ on fiscal retrenchment
Fiscal orthodoxy has changed. Organisations such as the IMF and the OECD have told governments that, with low interest rates seemingly here to stay, the costs of excessive borrowing are much lower for advanced economies than previously thought. The benefits, too, are greater, given the need for governments to take some of the burden off… Continue reading A fiscal policy for all seasons
A bruising start to the year for US government bonds has been accompanied by a striking shift in investor behaviour, with Treasuries becoming more sensitive to expected changes in fiscal rather than monetary policy. Victories in key Senate run-offs last week sparked investor bets that the incoming Biden administration will inject another major stimulus into… Continue reading US Treasuries dance to different tune as fiscal policy takes precedence
Being the only game in town is not a role that the world’s monetary policymakers have always felt comfortable playing. Central bankers are a quiet bunch, tending to prefer the boringness of the pre-crisis era to the limelight that’s shone on them for more than a decade now. So it is no surprise that in… Continue reading What Yellen’s career tells us her views on fiscal policy
Crude-oil futures headed lower on Thursday as light-trading volumes in the last trading session before Christmas left prices vulnerable to pullbacks amid concerns about whether a U.S. fiscal package will be signed into law by President Trump. Commodity investors have fretted that a resurgence in the COVID-19 pandemic in the U.S. and Europe in particular… Continue reading Futures Movers: Oil prices slide as traders focus on U.S. fiscal package in Christmas Eve trade
Stock markets may have a tough time extending their gains before the end of 2020 as investors take their chips off the table. That’s the theory touted by Steven Ricchiuto, chief U.S. economist for Mizuho, who said the puzzling inability of equities to extend their gains this week even though Congress passed a $900 billion… Continue reading The Tell: Year-end fund rebalancing may explain why stocks aren’t rallying despite a $900 billion U.S. fiscal deal
In every country, public finances have been knocked out of joint by the pandemic and the collapse in economic activity caused by lockdowns and social distancing. In addition, there is a growing sense that state planning is back — not in the form of classical socialist economics but in an acknowledgment that governments have a… Continue reading A wealth tax packs a powerful fiscal punch
U.S. benchmark stock indexes swept to new records Friday helped by hopes for another financial aid package from Congress to combat the economic impact of the coronavirus pandemic, with the November jobs report suggesting employment growth is slowing sharply. All four benchmark stock indexes — the Dow Jones Industrial Average, the S&P 500, the Nasdaq… Continue reading Market Snapshot: U.S. stock indexes sweep to records as hope for fiscal relief overshadows weak jobs data
Rishi Sunak’s message to the UK on Wednesday was stark. The nation’s “economic emergency has only just begun”, the chancellor said before warning that public borrowing and debt were “clearly unsustainable”. Anyone who did not get the message that tax rates would need to rise and that there would be more stealthy austerity was not… Continue reading ‘Economic emergency’ adds pressure for a rethink on fiscal rules
There is less than meets the eye to Rishi Sunak’s spending review: the UK chancellor’s statement to parliament offered few big changes to the budget trajectory the country was already on beyond additional short-term spending on the pandemic. Even so, the event was instructive — including outside the UK — for how it chose to… Continue reading UK Spending Review: There is no fiscal emergency
