The stimulus being prepared by the NPC for announcement next week seems more like the work of a marketing agency than an economic council. While the numbers are substantial, it’s more of a debt swap than a true stimulus package. Here’s why!

The stimulus being prepared by the NPC for announcement next week seems more like the work of a marketing agency than an economic council. While the numbers are substantial, it’s more of a debt swap than a true stimulus package. Here’s why!
The CBO has markedly worsened the deficit outlook since the last issuance update from the US Treasury in April. Expect the Treasury to communicate a sizable increase in the issuance target, but also expect them not to follow through on it. Let’s look at why.
How Germanys constitutional debt brake could hinder the green transition of Europe and leave Germany at the bottom of the leaderboard in the race towards fiscal deficits.
The U.S federal government is ringing in the new year with a 1% cut to all non-discretionary spending – a consequence of a little-known provision in the June debt ceiling agreement.
Have markets and REITs come to terms with higher interest rates, and should we really care? We’ve looked to see if a collapse was brewing – in the US or in Europe.
The U.S government will shut down on Sunday when FY23 funding elapses with no spending bill to replace it. This is how we assess the shutdown unfolding and how it will affect the outcome of the final 2024 budget.
Emerging market central banks demonstrated their foresight in 2021, acting ahead of the curve. However, there is a looming concern that the resurgence in energy prices might pose a challenge for them, much like it did in 2022.
Plenty of bets in LatAm carry trades unwound this week on the back of BoJ YCC tweak. But perhaps the LatAmsphere has a USD winner short term?
Pheew… close call! The bipartisan debt ceiling bill saved the U.S from economic disarray. Now we can all take a well-deserved summer holiday and bask in the sunshine of the long-term financial stability ensured by responsible lawmakers who have no interest in short-term solutions nor gains. But no – not so fast! We still have a looming government shutdown to attend to.
An agreement on lifting the statutory debt ceiling has been made, and the treasury general account now has to be replenished by issuing new debt. What does that imply for financial markets, and is the outlook as bleak as some pundits claim?
Does Biden and McCarthy have the necessary votes to suspend the debt ceiling and save the U.S from default?
US politicians are busy “negotiating” a new debt ceiling while Europe is celebrating the Ascension Day. Apparently, hopefulness of a debt ceiling deal could bring about optimism in markets, but we continue to warn against taking the plain vanilla approach to the situation. Here is why …
The hardships brought about by Covid and the Ukraine war initially fostered political unity across Europe. In this article however, I will argue that fragmentation may soon regain prominence as liquidity diminishes, labor markets weaken, and governments face the need to implement tighter fiscal policies. These circumstances create a fertile ground for the resurgence of the zero-sum debtor/creditor conflict that characterized the 2010s.
When it comes to the debt ceiling, politicians are not the only ones asleep at the steering wheel. Political commentators, too, seem freakishly calm telling folks that Congress *eventually* has to reach a settlement on raising the debt ceiling. While I don’t disagree with the end-result, it is astounding how few are concerned with the likely government crisis that will unfold before a deal is struck. We are underestimating the power of the Freedom Caucus and overestimating Biden’s willingness to avoid a government shutdown. The cocktail is putting the U.S. on a path towards debt brinkmanship.
Tuesday’s State of the Union address gave little cause for optimism that a looming debt crisis in the U.S. can be avoided. Speaker Kevin McCarthy, seemed as powerless as the day he was elected and Biden certainly didn’t make his life any easier.
Every Wednesday our Head of Research, Andreas Steno, goes through the 5 most important themes/charts in global macro right now and how we assess them. Enjoy!
On Thursday, the U.S. hits its 31.4 trillion-dollar debt limit. If Congress fails to raise or suspend the limit, the U.S. risks defaulting on its foreign debt with global economic ramifications. So naturally, Steno Research is launching a new ‘U.S. Debt Countdown’ watch series to keep tabs on when the U.S reaches the magic ‘X Date’: the day when The Treasury runs out of ‘extraordinary measures’ to postpone the worst-case scenario, and must succumb to default.
Every Wednesday, our Head of Research Andreas Steno, goes through the 5 most important themes/charts in global macro right now and how we assess them. Enjoy!