My three main points re the impact on the global #economy of the #RedSea navigation disruptions:
1. The longer they persist, the higher the adverse pressure on #inflation, interest rates, and #growth compared to what would have prevailed otherwise.
2. The absolute magnitude of this shock is a lot smaller when compared to the 2021-22 supply chain bottlenecks.
3. It is part of a more general phenomenon of global supply fragility and fragmentation.
What follows for the global economy depends on the implications of what the UK Foreign Secretary, Lord @David_Cameron, called the most "unstable, dangerous, and uncertain world' he can remember -- one in which the "red lights on the dashboard are very much flashing red."
#econtwitter
UK inflation disappoints at both the headline and core levels:
Headline inflation rose to 4.0% in December, above the consensus forecast looking for it to fall from 3.9% to 3.8%
Core inflation, which was also expected to fall, remained unchanged at 5.1%.
(For background on why the “last mile” in the inflation battle is likely to prove long and windy, please see this from yesterday morning: https://t.co/lzyi8UoeYx )
#economy #inflation #uk #econtwitter
From the @WSJ article on how "an emergency lending program the Federal Reserve created during the 2023 banking crisis has turned into easy money."
https://t.co/NxshzPBCWq
#economy#banks#econtwitter
From Bloomberg on the latest set of activity data out of China:
“The PMI figures provided more signs of weakness in China’s economic recovery in the final months of the year. They are also likely to add pressure on fiscal and monetary policymakers to act urgently, after leaders vowed to maintain a pro-growth stance in 2024.”
(Durable prosperity in #China needs more than just adding fuel to a tired #growth engine. It needs deeper reform of the growth engine itself.)
#economy #econtwitter
Hard to believe but the yield on the 10-year US government bond, a global benchmark, is back at the same level that it started 2023!
This at a time when the consensus expectations for US #growth is very different than a year ago; and there is greater sensitivity to bond issuance dynamic.
Yet another illustration of the power of market expectations for #FederalReserve policy.
#economy #markets #econtwitter
Apple still needs to introduce an Apple car. Some of its biggest smartphone rivals in China are moving faster. https://t.co/gLJPHCf2ko via @WSJ#M4D#Moneys4Dummies
Pessimists on the right argue that more migration will breed disorder, since people from other cultures will not assimilate. Yet studies find no solid evidence that diverse countries are less stable. Read how to detoxify the politics of migration https://t.co/AziKJgL9TX 👇