Englund

När aktier och huspriser stiger är räntan för låg.  Centralbankerna bör avskaffa målet om två procents inflation och i stället stabilisera tillgångspriserna. https://englundmacro.blogspot.com/search/label/cpi2p https://englundmacro.blogspot.com/search/label/Star Is the Fed’s Inflation Target Still 2%? https://englundmacro.blogspot.com/2025/12/s-feds-inflation-target-still-2.html Bessent Sees Room for Future Revamp of Fed 2% Inflation Target “Once we are back to 2 — which I think will be in sight — then we can have a discussion: Is it much smarter to have a range?” Bessent said in an interview on the All-In Podcast. “Once we re-anchor to the target, then we can talk about a range.” Fed policymakers in 2012 formally and publicly adopted the current 2% target, which is shared by many central banks around the world. Bessent said that the idea of “decimal-point certainty is just absurd.” But he said shifting the target at a time when inflation is running faster than that would risk givi...

  Apollo - Vår balansräkning är i riskreduceringsläge”, säger vd:n  https://englundmacro.blogspot.com/2025/12/apollo-var-balansrakning-ar-i.html Historien ger liberalismen rätt, anser Lars Jonung https://englundmacro.blogspot.com/2025/12/historien-ger-liberalismen-ratt-anser.html Var finns den bildade borgerligheten?  Bildningsfrågan har alltid funnits både till vänster och höger. Inom socialdemokratin har spänningen mellan vad som kallats bröd- och kultursossar följt rörelsen i över hundra år. Också borgerligheten har haft sin motsättning. I antologin Varken piano eller bildning från 2015 samlade Lars Anders Johansson exempelvis skribenter som sörjde hur borgerligheten tappat sin självbild som kulturbärare och reducerat kulturen till marknads- och nyttotänkande. För även den borgerliga bildningstraditionen var en gång verklig.  Den bar på en idé om ansvar, om kulturarv och om en bildning som skulle vidga medborgaren – inte sortera honom. Johan Sjölander, chef Tankes...

Beyond 2028, the central bank expects inflation to be back on target at 2% with the federal funds rate at 3%. So, the Fed thinks the neutral policy rate, in due course, will be 3% in nominal terms,  or 1% after adjusting for inflation. Fed Chair Jerome Powell says that the current rate is “modestly restrictive.”  He’ll keep saying the same if the Fed (as expected) cuts again later this month and then again in December, as long as inflation is still above target.   Given all the complications and uncertainties, he’s unlikely ever to tell investors what they would love to know: how many basis points above the here-and-now neutral rate he believes the policy rate to be. An excellent new book by my colleagues at Bloomberg Economics, The Price of Money, https://www.amazon.com/Price-Money-Present-Natural-Interest/dp/0197800912/ surveys the research and concludes that the real natural rate for US 10-year government debt fell from nearly 5% in 1970 to 1.7% in 2012. Clive Crook Bl...

  The AI bubble is 17 times the size of the dot-com frenzy — and four times subprime, this analyst. Artificially low interest rates have stimulated investment into AI that has hit scaling limits, says research firm. Decidedly from the pessimistic camp. It’s a take from independent research firm the MacroStrategy Partnership, which advises 220 institutional clients, in a note written by analysts including Julien Garran, who previously led UBS’s commodities strategy team. You have to go way back to 19th century Swedish economist Knut Wicksell. Wicksell’s insight was that capital was efficiently allocated when the cost of debt to the average corporate borrower was two percentage points above nominal GDP. Only now is that positive after a decade of Fed quantitative easing pushed corporate bond spreads low. LLMs, he argues, already are at the scaling limits. “We don’t know exactly when LLMs might hit diminishing returns hard, because we don’t have a measure of the statistical complexity...

  The belligerent president has trashed America’s monetary credibility.   The world’s superpower central bank will set interest rates at his whim, much like the Turkish central bank under the Erdogan regime. They must also assume that Trump will force the Fed to press the pedal to the floor and slash interest rates far below the natural Wicksellian rate until the midterm elections are safely out of the way next year. Trump has crossed the Rubicon by purging an independent member of the seven-strong Fed board, each appointed for 14 years with Senate confirmation and protected tenure to shield them from pressure. He cannot force the global bond market to buy US treasuries and fund his debt. The Achilles’ heel of Trumpism is that the US has a net international investment position of minus $24.6 trillion, or 82pc of GDP.  It has a personal savings rate of 4.7pc, a fraction of US post-war levels or of global levels, and is living off a constant supply of foreign credit to...

   After Jerome Powell, Who Else Is Speaking at Jackson Hole? From left, Bank of England Governor Andrew Bailey, European Central Bank President Christine Lagarde and Bank of Japan Governor Kazuo Ueda join Federal Reserve Chair Jerome Powell at the Jackson Hole conference Friday. (Jim Urquhart/Reuters) https://www.wsj.com/livecoverage/stock-market-today-jackson-hole-jerome-powell-08-22-2025/card/after-jerome-powell-who-else-is-speaking-at-jackson-hole--D7wVmrYgxkKgclbqZpP6 ”Den förändrade riskbalansen motiverar en justering av vår penningpolitiska hållning” Jerom Powell upprepade på fredagen att han betraktade centralbankens nuvarande politik som endast ”måttligt” restriktiv, vilket innebär att det inte återstår särskilt mycket i form av räntesänkningar innan Fed når en ”neutral nivå” som varken överhettar eller bromsar ekonomin. https://www.di.se/live/fed-chefen-oppnar-for-rantesankning-borsen-stiger Chair Jerome H. Powell  August 22, 2025 https://www.federalreserve.gov/...

ECB’s Newest Rate-Setter Has Seen the World Order Collapse Before The 69-year-old head of Bulgaria’s central bank was a Finance Ministry official in the 1980s when the Communist government abruptly closed it.  fter witnessing the regime’s eventual collapse and the ministry’s reinstatement, he helped his country emerge from a bout of hyperinflation before joining the push to make it the euro area’s 21st member. After hyperinflation abated in the 1990s, the country pegged its currency, the lev, first to the Deutsche mark and then to the euro — effectively surrendering control over its monetary policy “Politics is often seen as a source of stability,” Radev said. “In reality, it is increasingly a source of volatility, uncertainty and systemic risk. This is something central banks must factor into their assessments. ” Joining the bloc also required a cleanup of Bulgaria’s financial sector, where murky ties between politicians and businesses triggered a banking crisis just over a decade...

The deposit rate was decreased by a quarter-point to 2.25% The ECB dropped the word “restrictive” from its statement in relation to the monetary-policy stance.  But markets boosted bets on further cuts in borrowing costs as officials underscored the headwinds that Europe currently faces. “Downside risks to economic growth have increased,” President Christine Lagarde told reporters  https://www.bloomberg.com/news/articles/2025-04-17/ecb-interest-rates-trump-tariff-fears-trigger-another-cut 16.35 Tillbaka till Rolfs länktips 17 april 2025; Chinese Dream, den allsmäktiga amerikanska dollarn https://englundmacro.blogspot.com/2025/04/rolfs-lanktips-17-april-2025-chinese.html

  R-star debate becomes less useful as monetary policy approaches neutral level The problem? R-star is a moving, invisible target.  This puts central bankers in a bind. On the one hand, R-star is essential: policy rates can only be deemed “expansionary” or “restrictive” relative to it.  On the other, it is elusive: an uncertain, ever-changing benchmark is a shaky foundation for policymaking. Fabio Panetta governor of the Bank of Italy Financial Times 26 March 2025 https://www.ft.com/content/44349782-f767-480f-8afb-99626337406c

  Enligt henne befinner sig styrräntan redan på en nivå som håller tillbaka ekonomin i stället för att stötta den.  Givet lågkonjunkturen är det därför osannolikt att Riksbanken i närtid skulle vilja byta spår och börja höja styrräntan, säger hon. SvD 19 mars 2025 https://www.svd.se/a/25lwkx/ekonomer-splittrade-om-riksbankens-nasta-drag

ECB sänker styrräntorna med 0,25 procentenheter.  Den nya inlåningsräntan landar därmed på 2,75 procent. https://englundmacro.blogspot.com/2025/01/rolfs-lanktips-30-januari-2025.html ”Vid denna tidpunkt är vi fortfarande i restriktivt territorium och vi har inte diskuterat ännu när vi ska stoppa” DI 30 januari 2025 https://www.di.se/analys/rantegapet-kan-bita-tillbaka/ The ECB cut rates, and markets are convinced more will follow The critical question now is to identify the neutral rate, known in the jargon as r*, at which policy is neither restrictive nor accommodative.  Lagarde said that ECB monetary policy remained restrictive, but...   conditions in the banking system  — more important in Europe than in the US where many companies rely on bond finance — remain looser than for most of the time since the Global Financial Crisis began in 2007. Another sign of growing resilience comes from banking stocks.  Brutalized by the GFC and by the euro-zone sovereig...

Trump will take tariffs much higher than before — to at least 10% of aggregate imports, compared with 3% in his first term.  He’s genuinely a fan, seeing them as a great negotiating tool and income generator.  Trump will follow through on deportations, but I expect less rather than more. Ejecting millions of people from the US is logistically difficult.  A committed effort would take years, not months, and the resulting labor shortages would be too economically damaging.  Still, even a smaller number — say, focused on convicted criminals — will exacerbate a shortage of workers that is limiting growth. Expect higher inflation, elevated interest rates, slower growth and more volatility as markets and the Fed struggle to adjust to Trump’s pronouncements and actions.  Bill Dudley  Bloomberg 22 January 2025 https://www.bloomberg.com/opinion/articles/2025-01-22/trump-s-economics-are-anybody-s-guess-here-s-mine Bill Dudley: I think r* is a lot higher than the...

  Looking backward, the natural 10-year rate sank from 12% in 1980 to less than 4% by 2015  The natural rate by 2024 had probably moved up to 4.5%, Bloomberg Economics estimates. And “we expect the natural rate to keep edging up, with nominal 10-year Treasury yields moving closer to 5% in the early 2030s,” Rush and his colleagues wrote. https://www.bloomberg.com/news/newsletters/2025-01-14/the-world-s-benchmark-interest-rate-may-be-higher-into-the-2030s Drivers of the natural long-term rate of interest (and why the economy hasn’t tanked)  Martin Ademmer, Jamie Rush Oxford Open Economics, Volume 3, 2024, odae012,  Published: 10 July 2024  https://doi.org/10.1093/ooec/odae012 https://academic.oup.com/ooec/article/doi/10.1093/ooec/odae012/7710183 Den neutrala räntan är ett viktigt begrepp inom penningpolitiken https://englundmacro.blogspot.com/2024/11/den-neutrala-rantan-ar-ett-viktigt.html Årets snackis i ekonomvärlden: Blir räntan lika låg som före pandemin? http...

They just no longer agree on how high to keep U.S. interest rates to achieve their goal. The emerging rift centers on how aggressively the Fed should aim to slow inflation toward its 2% target — and how high the central bank will need to keep U.S. interest rates to achieve success. MarketWatch 24 December 2024 https://www.marketwatch.com/story/sticky-inflation-creates-rift-at-fed-over-how-much-to-cut-rates-f59de1db

Beyond ample anecdotal evidence from asset markets (and, indeed, sticky inflation), formal measures such as the Chicago Fed’s twin indexes of financial conditions have been loosening since March 2023. https://www.chicagofed.org/research/data/nfci/current-data If the Fed hadn’t devoted so much energy to head-faking investors with forward guidance promising to do things the central bank shouldn’t do, those investors would have been warning the officials that inflation remains far from whipped.  Were officials to yammer less at the markets, investors would be free to place meaningful bets about future inflation and send meaningful price signals about what the Fed should do in response.  This is what long-bond investors, who increasingly seem to despair of forward guidance, have already done. They’ve pushed up yields since September in exasperated anticipation of inflation to come. Joseph C. Sternberg Wall Street Journal 19 December 2024 https://www.wsj.com/opinion/does-the-fed-ev...

The Next Big Fed Debate: Has the Era of Very Low Rates Ended? Fed officials trying to figure out just-right interest rate and some think they might be close to that destination Powell has described recent rate reductions as an effort to recalibrate borrowing costs to a more “neutral” setting.  His framing raises a question that hasn’t been relevant until now: What, exactly, is “neutral” in the post-pandemic economy? The neutral rate of interest, or the rate that keeps the economy at full employment with stable inflation, can’t be directly observed. Instead, economists and policymakers infer it from the behavior of the economy. If borrowing and spending are strong and price pressures are rising, the current interest rate must be below neutral. If they are weak and inflation is receding, rates must be above neutral. Every quarter, Fed officials project where rates will settle over the longer run, which is in effect their estimate of neutral.  The median estimate declined from 4....

Sidea: Nu råder stor osäkerhet kring räntebanan https://www.bloomberg.com/news/articles/2024-12-13/the-fed-s-neutral-interest-rate-what-is-it-and-why-does-it-matter  “As is often the case, we are navigating by the stars under cloudy skies.”  https://englundmacro.blogspot.com/2024/12/powell-star-fed-can-move-more-slowly.html Tillbaka till Rolfs länktips 18 december 2024 https://englundmacro.blogspot.com/2024/12/rolfs-lanktips-18-december-2024.html

 ECB-chefen Christine Lagarde sade vid en pressträff att tillväxten har förlorat momentum, och det fanns en viss diskussion om att sänka 50, men de var eniga om 25.  De hade inte talat om var den neutrala räntan ligger.  https://www.di.se/nyheter/ecb-sankte-rantan-europarantorna-steg/ Tillbaka till Rolfs länktips 12 december 2024 https://englundmacro.blogspot.com/2024/12/rolfs-lanktips-12-december-2024.html

The economy is strong, and it’s stronger than we thought it was going to be, which means the Fed can move more slowly in reducing borrowing costs.  “The good news is that we can afford to be a little more cautious as we try to find” a rate-setting that neither spurs nor slows growth, Powell said. Officials are trying to set rates closer to a so-called neutral level that neither spurs nor slows growth. They aren’t sure where that is, but most think it is likely below 4%. Wall Street Journal 4 December 2024 https://www.wsj.com/economy/central-banking/december-fed-rate-cut-powell-be4a617f  “As is often the case, we are navigating by the stars under cloudy skies.”  In practice, policymakers try to feel their way to neutral by moving slowly. https://englundmacro.blogspot.com/2024/11/den-neutrala-rantan-ar-ett-viktigt.html Tillbaka till Rolfs länktips 5 december 2024 https://englundmacro.blogspot.com/2024/12/rolfs-lanktips-5-december-2024.html

  Samtidigt som räntan sjunker har många föreningar bundna lån som löper ut, och när de läggs om sker det till betydligt högre ränta än tidigare.  Över tid bör man räkna med en snittränta kring 3 procent, menar Cecilia Jutell, chef för analys och rådgivning vid HSB Stockholm. Majoriteten av HSB:s föreningar i Stockholm har inte aviserat någon avgiftshöjning för 2025.  Och utslaget på samtliga föreningar som ingår i statistiken är den genomsnittliga avgiftshöjningen blygsamma två procent. Det betyder att kostnaden för framtida underhåll i många fastigheter blir ett problem som får hanteras av kommande styrelser. DN 27 november 2024 https://www.dn.se/ekonomi/hsb-stockholm-foreningarnas-avgiftshojningar-racker-inte/ Brf måste redovisa sju nyckeltal Det är tio år sedan SvD avslöjade att många föreningar hade satt i system att skjuta sparandet på framtiden genom så kallad progressiv avskrivning, något som sedan förbjöds, våren 2014. Johan Hellekant SvD 28 december 2023 https:/...