Entries filed under 'International Economy & Policy'

    An Early Look Ahead to 2017

    October 21, 2016 12:15 PM by Zane Brown

    Here’s an advance look at macroeconomic and investment trends to watch next year.

    Even though it’s not yet Halloween, we already have started receiving requests for our views on prospects for various asset classes in the coming calendar year.

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    Reassuring Words from the Fed and the Bank of Japan

    September 21, 2016 4:45 PM by Zane Brown

    After the European Central Bank spooked investors earlier in the month, policymakers in the United States and Japan emphasized “lower for longer” rate expectations on September 21. 

    After the European Central Bank (ECB) disappointed investors two weeks ago by deciding not to step up its bond-buying program, subsequently spurring a rise in yields across the globe, the Bank of Japan (BoJ) and the U.S. Federal Reserve (Fed) offered more market-friendly policy statements on September 21. 

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    Eurozone in the Comfort Zone?

    May 24, 2016 11:00 AM by Harold E. Sharon

    No, not quite. While overall growth in the first quarter of 2016 finally returned to pre-crisis levels, the need for significant structural reforms still looms large.

    It took eight years and a double-dip recession, but the eurozone’s gross domestic product (GDP) has finally surpassed the levels seen during the pre-crisis era.

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    ECB: Draghi Drops the Big One

    March 10, 2016 2:52 PM by Zane Brown

    Here’s a look at the investment implications of the European Central Bank’s massive new stimulus effort.

    European Central Bank (ECB) president Mario Draghi has said he would do “whatever it takes” to boost a stagnant eurozone economy. On March 10, global investors learned that in this context, “whatever” means “more than you can imagine.”

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    How Could ECB-Fed Divergence Affect LIBOR?

    December 28, 2015 11:45 AM by Zane Brown

    Here’s a look at how the benchmark lending rate might respond to the differing policy paths of U.S. and European central banks.

    How can we expect LIBOR—more formally, the London Interbank Offered Rate—to react if the European Central bank (ECB) is aggressively easing its monetary policy while the U.S. Federal Reserve (Fed) does the opposite?

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    Global Economy: Developments to Watch after Paris

    November 19, 2015 4:20 PM by Zane Brown

    What should investors be monitoring in the wake of the attacks on November 13? 

    As governments respond to the threat of terrorism in the aftermath of the November 13 attacks in Paris by Islamic State (IS), some developing trends may have significant economic implications. 

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    Deflation: What's the Problem?

    July 24, 2014 11:44 AM by Lord Abbett Editorial Staff

    In the Eurozone, as elsewhere, heavily indebted countries will be hurt most.

    Economic growth in the eurozone continues to be weak, and inflation has been declining as well. Like most central banks, the European Central Bank is concerned about the possibility of deflation and is implementing policies to combat it. But is deflation really a problem?

    Financial journalist James Grant and others have argued that deflation is not the problem it’s made out to be. In fact, it is the natural result of improvements in efficiency that have resulted from computer technology and the Internet. If business costs have been reduced dramatically, it only makes sense that consumer prices would also come down. This kind of deflation is also known as a higher standard of living, says Grant.  

    So why do central banks consider deflation the enemy?

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    Why Europe May Attract More Investor Attention

    April 23, 2014 2:01 PM by Harold E. Sharon

    After years of lagging the global economic recovery, Europe is showing signs that it can stave off deflation and rekindle meaningful growth.

    Harold Sharon, Lord Abbett Partner and International Strategist

    While other major economies have recovered at varying rates from the global financial crisis, the eurozone has been the clear laggard. For Europe, stimulus came late, was very hard to coordinate in a timely way, and was diluted over time.  The upshot is that Europe, if policymakers can agree, has more room to accommodate further measures, such as central bank support, fiscal reforms, and structural economic reforms.  If so, there may be more reaction still ahead in Europe that can support the capital markets, and perhaps this warrants more investor attention for that reason alone.

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