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Andreas Höfert

Andreas Höfert is Chief Economist Wealth Management and Regional Chief Investment Officer Europe.

Andreas Höfert recently

June 2015

  1. The couch potato option to public debt

    Blog post | Tags: Follow UBS, Andreas Höfert

    Industrialized countries’ public debt-to-GDP ratios have increased since the financial crisis to levels last seen right after World War II. In the years to come, addressing this issue will be an important task for governments. How they do it will be paramount for investors assessing the financial environment.

  2. How Greece divides and (maybe) conquer

    Blog post | Tags: Follow UBS, Andreas Höfert

    It is said that humor dies last, even after hope. If this is true, then resolving the Greek crisis seems to have become a hopeless endeavor. Indeed, Jean-Claude Juncker, president of the European Commission, usually never at a loss for a joke, was most grave before the G7 meeting and implicitly accused his “friend,” Greek Prime Minister Alexis Tsipras, of having lied to him.

  3. The risk of repeating 1992

    Blog post | Tags: Follow UBS, Andreas Höfert

    In contrast to what the broader public supposedly believes, central banks can sometimes blunder. In the long history of money and central banking, failures and mistakes in fact are more the rule than the exception. What are regarded as today’s monetary policy “successes” may be reinterpreted, given a sufficiently long historical perspective, as huge errors. Only time will tell.

May 2015

  1. Strikes in Germany are bad for me, but good for the euro

    Blog post | Tags: Follow UBS, Andreas Höfert

    For over 10 years now, I have done roadshows in France twice a year, once in the spring and once in the fall, to present UBS’s economic outlook and investment strategy. Those trips have always smacked of adventure. Taking trains, planes and even automobiles has been like playing a lottery in which the winning ticket means that everything goes as planned.

  2. Three rebounding 2014 overshoots shouldn’t shake the Eurozone

    Blog post | Tags: Follow UBS, Andreas Höfert

    Three strong trends characterized 2014: the US dollar strengthened (especially against the euro), oil prices dropped and European yields slid. All three shifts have halted or even reverted in 2015. What’s causing this, and what are the potential consequences?

  3. Deflation: is it about growth or distribution?

    Blog post | Tags: Follow UBS, Andreas Höfert

    If there is one topic that most mainstream economists can agree on, it is that deflation is fundamentally bad. As such, it should be avoided by all means and central banks should ensure that “it doesn’t happen here” as ex-Federal Reserve Chief Ben Bernanke once said in a famous speech.

April 2015

  1. Fifty shades of Greece

    Blog post | Tags: Follow UBS, Andreas Höfert

    At last Friday’s Eurogroup meeting in Riga, Greece was supposed to deliver a comprehensive, detailed list of reforms. This would have finally unblocked the last EUR 7.2bn of the second bailout program and avoided serious trouble until the end of June. But it was already clear at the beginning of last week that this deadline wouldn’t be met.

  2. The ever more bizarre government bond market…

    Blog post | Tags: Andreas Höfert

    Spotting an asset price bubble before it bursts is tough. Qualifying the frenzy before a bubble explodes as a "bubble" in hindsight is easy. This is why many central bankers still follow the Greenspan doctrine, which states that it is not the role of monetary policy to "pop" asset bubbles in the making. Instead, central banks are there to mitigate and sweep up damages after a burst.

  3. Bernanke's blame on Germany

    Blog post | Tags: Andreas Höfert

    Besides renewed fears of a Grexit or Graccident and increasing doubts about the strength of US economic growth after a dismal US labor market report for March, another interesting event took place during the Easter week: former Federal Reserve Chairman Ben Bernanke has started a blog (see:

  4. Is a Swiss sovereign wealth fund such a bad idea?

    Blog post | Tags: Andreas Höfert

    The idea of a sovereign wealth fund was discussed when the Swiss franc floor was introduced in the fall of 2011, in anticipation of a swell of foreign exchange (FX) reserves at the Swiss National Bank (SNB). This idea resurged when the floor was lifted on 15 January 2015. What should the SNB do with the SNB’s FX reserves that now amount to more than 80% of Switzerland’s gross domestic product?

March 2015

  1. Looking for a new day dawning on the European periphery

    Blog post | Tags: Andreas Höfert

    Barring a Grexit or “Graccident,” this year could be the one in which the Eurozone finally achieves escape velocity from crisis. The weaker euro, low oil prices, a German growth juggernaut - all should contribute to the needed boost. However, alongside the political and deflationary risks, there are potential blemishes on this rosy picture.

  2. The curse of low and even negative interest rates

    Blog post | Tags: Andreas Höfert

    Negative interest rates in the Eurozone, Denmark and Switzerland have lately become the new tool of central banking. This has led to quite bizarre occurrences. At one stage this year, the whole Swiss yield curve from 0-16 years slipped into negative territory. Germany issued a five-year government bond with zero coupons; it was oversubscribed. Some investors are willing to pay the German government for it to keep their money without interest for the next five years.

  3. Currency wars: What country is the next victim?

    Blog post | Tags: Andreas Höfert

    On 15 January the Swiss National Bank (SNB) abandoned its exchange rate floor against the euro, “the cornerstone of Swiss monetary policy” up to that point. Since this tumultuous event, not a single day has passed without clients asking me what country might be the next victim in the ferocious global currency war, i.e. which central bank could be forced to throw in the towel, unable to resist the mighty market forces?

February 2015

  1. Thinking the unlikely: Grexit consequences

    Blog post | Tags: Andreas Höfert

    The negotiating heat is on. Oaths are being spoken. Ultimatums given. Lines drawn. Doors slammed. No one would have expected otherwise. We believe the horse trading taking place between Greece and its Eurozone creditors qualifies at best as a “lose-lose” situation.

  2. Deflation's hidden threat

    Blog post | Tags: Andreas Höfert

    It is contradictory to speak of “negative inflation,” but when did that ever stop economists? The phrase oxymoronically but aptly describes the problem confronting an increasing number of countries worldwide. The most obvious reason is the oil price, which has more than halved in US dollar terms over the last two quarters. Therefore, even when inflation is “turning negative” on a global scale, we would still not be in a state of deflation.

  3. The war the US is not fighting

    Blog post | Tags: Andreas Höfert

    “The US is losing the currency war” is the title of an article published on 2 February by the German news magazine Die Zeit. Indeed, the mighty US dollar, which has appreciated almost 20% on a trade-weighted basis since June, seems to pose a tremendous challenge to the US. Die Zeit is even hinting at the possibility of the US economy stalling. But does the US really have to worry?

January 2015

  1. Syriza, TINA and the trilemma

    Blog post | Tags: Andreas Höfert

    Markets were calm last Monday. The extreme left party Syriza’s victory in the Greek general election was “well anticipated” and hence “priced in.” Now, however, tough negotiations, even psychodramas, are inevitable, since the aspirations of Syriza and the Greek people seem to contradict the claims of Greece’s creditors. We had already a foretaste during this week with the announcement of the government – much more hardline, than what was anticipated – and Greece questioning the new sanctions of the European Union against Russia.

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