Changing governments, changing policies
- The two parties attempting to form the next
Italian government have published their agreed policies. These include cutting
income taxes to 15% (20% for incomes over EUR 80,000), and introducing a
universal income. This is an interesting challenge for fiscal policy. The ECB
might want to consider how its bond buying program is assisting with this
- US President Trump announced a policy
U-turn over Twitter, ordering the Commerce Department to assist the Chinese
telecoms company ZTE. Policy U-turns are not necessarily unusual, nor are
policy announcements over Twitter. However, sanctions against ZTE were legally
inspired, not politically inspired. There is now questionable consistency in
the sanctions policy towards Iran.
- Malaysian financial markets opened after
the opposition won the general election. The ringgit has weakened a little, and
equities have risen a little – but the reaction is very muted. The new finance
minister, Lim, is generally regarded positively by investors.
- Assorted central bankers crowd the agenda
today. Bullard of the Fed is to speak at a crypto conference. Bitcoin has lost
roughly USD 1,300 in the past nine days. If a cryptocurrency collapses and
nobody cares, what does that say about the usefulness of the cryptocurrency?