Après Lagarde, un économiste?

Daily update

The Financial Times reports ECB President Lagarde will leave office before their term ends—allowing a successor to be appointed before next year’s French presidential elections. This makes little difference to near-term policy—the ECB has adopted a stance of masterful inactivity. It might make a difference longer term. Lagarde’s successor could even be an economist (which would obviously be an excellent choice)—and the cumbersome nature of the policy council places extra emphasis on the leadership.
UK consumer price inflation was largely as expected—distortions from airfares fading away, and deflation in some sectors. Of more note was the disinflation and deflation evident in producer prices, which supports the Bank of England’s views of a relatively rapid future disinflation episode.
US manufacturing production data is due. Manufacturing only grew a little last year, in spite of the Biden-era manufacturing investment boom, but more growth is expected today. Manufacturing employment is trending lower, reflecting the capital intensity of this sector.
The minutes of the last US Federal Reserve meeting are due, and with Fed Chair nominee Warsh suggesting a desire to shrink the Fed’s balance sheet the details of the discussions assume more importance. Warsh will need support for that position—the minutes may show if any exists already.