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.

Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Macroeconomics

<p>The last Federal Open Market Committee (FOMC) meeting for 2019 could provide insights into members' willingness to embrace a symmetric approach to inflation targeting, which would be bullish for equity investors due to interest rates being kept lower for longer. Past policy conduct has produced declining inflationary expectations that threaten to undermine the efficacy of low interest rates, thereby raising the incentive to tolerate inflation above the 2% target. </p>
<div>The FOMC is currently undertaking a policy review, due for completion next June, about the means to achieving their dual mandate, including having the average rate of inflation of the previous upswing potentially setting the desired average rate over the following expansion. Historically, financial markets would have balked at the idea of the FOMC tolerating higher inflation, but members' assurances that any upward drift to acceptable inflation will be temporary should  limit the fallout due to high anti-inflation credibility.</div>
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<div>Despite a faltering ISM <em>Report on Manufacturing Business</em> for November, it is too early to conclude that more softening will follow, thereby forcing the FOMC to engage in further monetary easing. Meanwhile, continued robust labour market metrics suggest the Fed will sit on the sidelines for the time being. </div>
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<div>Since the global financial crisis, central banks in the US, Eurozone and Japan have all struggled to meet their inflation targets, notably the Bank of Japan (BoJ). Despite rising consumer prices due to higher food inflation, China is also struggling to escape the clutches of low inflation, particularly given weak pipeline pressures, thereby fueling speculation that the People's Bank of China (PBoC) will raise their inflation target next year. </div>
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<div>The heads of the European Central Bank and PBoC both appear to favour upgrading the role of fiscal policy towards supporting aggregate demand as opposed to greater monetary accommodation. Meanwhile, the Japanese government has announced  another fiscal stimulus to offset weakness stemming from October's sales tax hike, while Governor Kuroda has dismissed suggestions of further monetary easing, possibly due to its adverse impact on the financial health of regional banks.</div>
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The last Federal Open Market Committee (FOMC) meeting for 2019 could provide insights into members' willingness to embrace a symmetric approach to inflation targeting, which would be bullish for equity investors due to interest rates being kept lower for longer. Past policy conduct has produced declining inflationary expectations that threaten to undermine the efficacy of low interest rates, thereby raising the incentive to tolerate inflation above the 2% target. 
The FOMC is currently undertaking a policy review, due for completion next June, about the means to achieving their dual mandate, including having the average rate of inflation of the previous upswing potentially setting the desired average rate over the following expansion. Historically, financial markets would have balked at the idea of the FOMC tolerating higher inflation, but members' assurances that any upward drift to acceptable inflation will be temporary should  limit the fallout due to high anti-inflation credibility.


Despite a faltering ISM Report on Manufacturing Business for November, it is too early to conclude that more softening will follow, thereby forcing the FOMC to engage in further monetary easing. Meanwhile, continued robust labour market metrics suggest the Fed will sit on the sidelines for the time being. 


Since the global financial crisis, central banks in the US, Eurozone and Japan have all struggled to meet their inflation targets, notably the Bank of Japan (BoJ). Despite rising consumer prices due to higher food inflation, China is also struggling to escape the clutches of low inflation, particularly given weak pipeline pressures, thereby fueling speculation that the People's Bank of China (PBoC) will raise their inflation target next year. 


The heads of the European Central Bank and PBoC both appear to favour upgrading the role of fiscal policy towards supporting aggregate demand as opposed to greater monetary accommodation. Meanwhile, the Japanese government has announced  another fiscal stimulus to offset weakness stemming from October's sales tax hike, while Governor Kuroda has dismissed suggestions of further monetary easing, possibly due to its adverse impact on the financial health of regional banks.







Fed Aims to Fight Low Inflation Syndrome, but Foreign Central Banks Face Worse With Lower Ammunition