MACRO ECONOMIC NEWS

Here comes the Monday with Magnificence

Wishing A Miraculous Week Ahead 

 

Best Regards

Arbind

 

-------------------------

Macro-Economic News 25 Jan 2021

 

The U.S. braces for more corporate prosecutions while in 2020, new investments by overseas businesses into the U.S., which for decades held the No. 1 spot, fell 49% in 2020. The FED is expected to leave policy unchanged as Chairman Jerome Powell is likely to underscore the central bank’s commitment to supporting the economy with low rates and continued bond purchases for the foreseeable future.

 

Emerging markets that are gripped by greed are now turning to FED for the fresh spur. However, some investment managers are raising concerns over the brewing of pain-trade for ‘growth-at-any-price’ investors and economists about central banking leading to bubbles everywhere.

 

2020 can be characterized by cheap money, flooding from the world’s major central banks, inflating assets. And this time, unlike the previous easings including 'taper-tantrum', policymakers are explicit and vividly clear in continuation of their loose policies. This cushioning of market volatility has an inevitable side effect of asset mispricing leading to more volatility ahead. Economic stability becomes vital before risks overtake enthusiasm in the dynamics of ‘economy-of-hope’.

 

Interestingly enough central bankers and legislators are well aware of the danger of surging valuations out of trillions of dollars in fiscal stimulus and other monetary support by lowering the return of safe assets for increasing demand of risky assets. And this is well enough as the cost of doing something appears to be less than the cost of NOT doing anything. Curious is the fact that the wealth of the world’s 500 richest people added nearly two trillion to their combined net worth.

-------------------------