MACRO ECONOMIC NEWS

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Macro-Economic News 14 Jan 2021

Central banks are showing concerns about the rising global leverage, especially debt level. Policymakers are beginning to split over when they may need to start pulling back on their massive monetary stimulus while Lagarde warns against an early tightening of stimulus efforts. Rubin says treasury should substantially boost the maturity of the debt. Commercial and residential rentals have started falling again for London to Sydney while NYC retail rents fall to historic lows.

 

The U.S. federal budget deficit continued to balloon at the end of last year on spending to cushion the pandemic’s economic fallout. Inflation expectations in Europe rise to their highest in over a year while the U.S. consumer-price index rose 0.4%. The U.S. deficit from October through December totaled a record $573 billion, widening 61%, as federal outlays rose 18%, whereas the Beige Book forecasts choppy U.S. economic growth before the fiscal lift. The ECB’s latest projections for economic growth in the euro area are still “very clearly plausible” despite the resurgent coronavirus. 

 

Good news flow for India as CARE lowers Centre’s fiscal deficit projection to 7.8% of GDP. India Inc gets back to office cautiously, even as many MNCs remain shut. RBI report finds Indian Banks to be resilient even if there is a 15% run on deposits. Corporate funding is increasing in promising sectors. New port law is expected to open floodgates for the privatization of operational cargo berths, although surging shipping rates are a new headwind for the global economy. 

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