Follow Joshua McCallum
Joshua McCallum is Head of Fixed Income Economics at UBS Global Asset Management, where he provides economic analysis to support and challenge portfolio managers. Before joining UBS in 2005, Joshua worked for the UK Treasury, dealing with an eclectic range of topics including international macroeconomics, the UK budget, economic reform in Europe, and post-conflict fiscal policy in Iraq.
It seems that the Eurozone has been benefiting from the law of unintended consequences. When the Euro was strong back in 2012, net exports were the only positive contributor to growth. Now that the Euro has been weakened by the implementation of QE, the net exports contribution has been marginal compared to consumption. So what went wrong, or, to look at it another way, what has gone right, but maybe just not in the way the ECB intended?
The waiting game continues. Yet again, the Fed have deferred the decision to raise rates and yet again, analysts and commentators are scrutinising the signals which their decision sends out. But in focusing on the short-term timings of a rate move, are markets paying sufficient attention to the bigger picture? The most dovish, and arguably noteworthy aspect of the FOMC's deliberations is the ongoing trend towards pessimism in their long-run expectations and what that says about the outlook for US GDP growth over the next few years.
After a prolonged period of slowdown, growth in the economies of Europe’s periphery finally appears to be catching up with growth levels in the core, as the ECB’s intensive programmes of monetary (and non-monetary) support bear fruit. However, with large output gaps and high unemployment rates in many countries, one might wonder how sustainable the recovery in those economies will be. And, in particular, which countries will be more able to bring their unemployment rate down.
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