At TS Lombard, we provide deep and early insight in order to help our investment management clients better assess macro economic and political drivers of the global economy and major asset classes. Unlike many other independent research firms, we look at both the economic and political landscape before giving you our recommendations based on the bigger picture – in a concise, clear and complete fashion.
We said: “RMB bias to appreciate: China’s growth prospects remain on track, while the renminbi has held up well this year compared with most other currencies. At the same time, the PBoC has turned to more cautious easing, while the government uses fiscal policy to boost activity and fight deflation. Domestic fundamentals therefore remain supportive for the currency.” Outcome: See Chart - RMB Exchange Rates
We Said: The inflation lessons of the expansion and demands to be responsive to minority employment mean the Fed’s new framework is employment first, and foremost. In the coming cycle, they will simply let employment run until inflation starts to rise. They give themselves the right to do this because the 2% ceiling is now a long-term average, and there have been many years with inflation under 2%. In the meantime, the essential promise of this policy is that the Fed is going to stay out of the way once the growth cycle takes hold. (US Watch, July 30). Outcome: The above policy was officially announced by Powell at Jackson Hole a month later.