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Didn't we know that already?

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Possibly outgoing Fed Chair Yellen signaled that a US rate rise in December was to be expected. It was expected anyway, but perversely markets reacted to something that they already anticipated. Yellen also noted that throwing fiscal stimulus at an economy at full employment was an interesting approach.
  • Yellen defended central bank independence – just as another reality TV star (Ed Balls of the UK) suggested that political accountability rather than independence would not be too harmful. Clearly Mr. Balls has forgotten what happened to the Kingdom of Szechuan in the eleventh century. Politics and quantitative policy are a disastrous combination.
  • German Finance Minister Wolfgang Schaeuble changed his normal Teutonic rallying cry from "we must have discipline" (aimed at Greece) to "we must have pain" (aimed at the UK), listing the ways the UK could be made to regret leaving the EU (leaving Germany alone as the economic balance of power tilts towards France).
  • ECB President Draghi offers an address to Europeans today – ahead of the expectation of clarification around quantitative policy at the central bank meeting next month. German producer price inflation is a rare moment of interest in an otherwise largely empty data calendar.