Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Macroeconomics

<ul>
<li>Looming political changes in Japan could impact the conduct of monetary policy, following earlier and intense pressure to arrest the sharp decline in the yen during 2024.</li>
<li>The four contenders for becoming the new Liberal Democratic Party (LDP) leader do not all share the same views on the BoJ's attempt to normalise policy settings.</li>
<li>An extended policy adjustment pause by the BoJ could be detrimental to its credibility, analogous to what befell the Fed after the infamous 2013 taper tantrum.</li>
</ul>


Looming political changes in Japan could impact the conduct of monetary policy, following earlier and intense pressure to arrest the sharp decline in the yen during 2024.
The four contenders for becoming the new Liberal Democratic Party (LDP) leader do not all share the same views on the BoJ's attempt to normalise policy settings.
An extended policy adjustment pause by the BoJ could be detrimental to its credibility, analogous to what befell the Fed after the infamous 2013 taper tantrum.


Bank of Japan and Next Liberal Democratic Party Leader Must Create a New Nexus

<ul>
<li>Financial markets took fright from the weaker than expected July <em>Employment Situation</em> report. Fed policy remains data-dependent and the Fed will wait for more data to formulate an appropriate response.</li>
<li>BoJ policy has seemingly broken the attraction of the yen carry trade, beneficial for US equities in 2024. Financial market volatility has forced the BoJ to postpone policy rate increases. </li>
<li>The case for an emergency Fed policy rate cut remains unconvincing, particularly when current circumstances are compared to other instances of inter-meeting policy rate reductions back in 2020 and 2001.</li>
</ul>


Financial markets took fright from the weaker than expected July Employment Situation report. Fed policy remains data-dependent and the Fed will wait for more data to formulate an appropriate response.
BoJ policy has seemingly broken the attraction of the yen carry trade, beneficial for US equities in 2024. Financial market volatility has forced the BoJ to postpone policy rate increases. 
The case for an emergency Fed policy rate cut remains unconvincing, particularly when current circumstances are compared to other instances of inter-meeting policy rate reductions back in 2020 and 2001.


Data Dependent Fed Unfazed by Fallout from Unwinding Carry Trades

<ul>
<li>The Fed has been a political institution since its inception, while its responsibilities have been changed over time.  Political pressure on the Fed is counter-cyclical will always prevail this way.</li>
<li>Markets have become decidedly more dovish about the Fed's policy conduct as the presidential election approaches, effectively raising the ante on the Federal Open Market Committee. </li>
<li>President Trump wishes the federal funds rate to remain unchanged until the election, but the current FOMC membership suggests at least one policy rate cut this year. </li>
</ul>


The Fed has been a political institution since its inception, while its responsibilities have been changed over time.  Political pressure on the Fed is counter-cyclical will always prevail this way.
Markets have become decidedly more dovish about the Fed's policy conduct as the presidential election approaches, effectively raising the ante on the Federal Open Market Committee. 
President Trump wishes the federal funds rate to remain unchanged until the election, but the current FOMC membership suggests at least one policy rate cut this year. 


The Fed: A Political Institution Prepares Financial Markets for Lower Interest Rates

<ul>
<li>The US election campaign has taken significant twists in recent weeks, culminating with the removal of President Biden. Wall Street cannot be ambivalent about who wins in November, unlike 2020.</li>
<li>The People's Bank of China (PBoC) has unexpectedly lowered key lending rates, following disappointing Q2 economic growth. More aggressive interest rate cuts could happen once the Fed begins easing policy.  </li>
<li>Exchange rate movements in Q4 could be key to diffusing protectionist sentiment against China. Easier monetary policy in Europe and the US will force the PBoC to support China's exporters.</li>
</ul>


The US election campaign has taken significant twists in recent weeks, culminating with the removal of President Biden. Wall Street cannot be ambivalent about who wins in November, unlike 2020.
The People's Bank of China (PBoC) has unexpectedly lowered key lending rates, following disappointing Q2 economic growth. More aggressive interest rate cuts could happen once the Fed begins easing policy.  
Exchange rate movements in Q4 could be key to diffusing protectionist sentiment against China. Easier monetary policy in Europe and the US will force the PBoC to support China's exporters.


Heading Towards a Currency War? US and Chinese Policy Outlooks Suggest Trouble Ahead

<ul>
<li>The media are universal in their belief that a second Trump presidency will produce higher inflation. Fed Chairman Powell would serve the remaining segment of his current term if elected. </li>
<li>A further reduction in corporation tax and making the 2017 personal income tax cuts permanent are key fiscal policy goals of President Trump if elected for a second term.</li>
<li>Import substitution will raise inflation pressures unless there is supply-side transformation in the economy. Protectionism will reduce capital flows to the detriment of long-term interest rates and dollar exchange rate.</li>
</ul>


The media are universal in their belief that a second Trump presidency will produce higher inflation. Fed Chairman Powell would serve the remaining segment of his current term if elected. 
A further reduction in corporation tax and making the 2017 personal income tax cuts permanent are key fiscal policy goals of President Trump if elected for a second term.
Import substitution will raise inflation pressures unless there is supply-side transformation in the economy. Protectionism will reduce capital flows to the detriment of long-term interest rates and dollar exchange rate.


US Financial Markets: Preparing for a Changing of the Guard