Our perspective on global micro event and strategies.
Given the weak economic data and considerable uncertainty clouding today’s landscape, I must admit to being a bit skeptical about how long the current rally in risk assets can last. But in the interest of staying open to alternative views, I recently listened to an economist for a major Japanese financial company deliver a refreshingly optimistic take on the global economy and markets.
His main point was simply that this is the first time in modern history where fiscal and monetary policy are working together – both are coordinated, both are easing – because inflation is nowhere in sight. Usually, those two policy levers work against each other (i.e., “tight fiscal/loose monetary” or “loose fiscal/tight monetary”).
The atypical “loose fiscal/loose monetary” regime we have now sends a powerful signal to the markets, regardless of the damage done to…