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Waiting for Yellen

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Markets are fixating on US Fed Chair Yellen's speech at Jackson Hole tomorrow – reflecting the obsession with rates (the Fed is already tightening quantitative policy).
  • Why should the US tighten? There is an inflation problem. Most inflation measures are around, or above their 20-year averages. Policy is nowhere near average.
  • Spanish GDP is scheduled (look to the nominal numbers, given Spain's debt levels), as is the German ifo business sentiment data (prone to overreact to underlying economics)
  • There seems to be media interest in "helicopter money," with regard to Japan. It is worth noting that Japan has the highest inflation expectations in the developed OECD.