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The curse of Sisyphus (for economists)

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The markets have become more interested in the concept of US interest rate increases again, with Fed President Mester all but saying "the end is nigh" for zero rates – this in the wake of Fed Chair Yellen's tinge of hawkishness on Friday. We hear from vice-Chair Fischer today.
  • The continued upward surprise in core consumer price inflation must occasion some concern within the Fed over keeping policy unchanged. Today's data, however, is unlikely to change the assessment very much – durable goods orders, Case-Shiller house prices and consumer confidence.
  • In the Euro area the Greco-German crisis continues with all the persistence of a Sisyphean curse. As soon as a solution appears to have appeared, the dead weight of the crisis rolls down, squashing any optimism in its path. The Greeks are blaming the EU, the EU will not do a deal without the IMF, and the IMF is criticising the Greeks.
  • It is possible that the next payment to the IMF could become an engineered crisis (because the EU say that the IMF is necessary to a deal, and the Greek's say they cannot pay the IMF). This could therefore focus attention and force some sort of artificial deadline on proceedings.