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

Cross Asset Strategy

Prior to the arrival of COVID-19, support for aggregate demand from fiscal policy had been extremely unreliable, thereby making it virtually impossible for the Fed to restore pre-Great Recession policy settings. Recent fiscal stimulus and the likelihood of further measures have, however, raised the spectre of the Fed having to respond to economic overheating risks sooner-than-expected.
Fed Chair Powell rules out the possibility of economic overheating in 2021 due to the absence of any semblance of broad-based economic strength currently embedded in data. In contrast to previous cycles, inflation will have to overshoot the 2% target before the federal funds rate is increased, but the Federal Open Market Committee (FOMC) is reluctant to embrace a rule-based approach in this particular realm due to their desire to retain flexibility.
Treasury Secretary Yellen respects the Fed's legal independence, but she may face political pressure from her new paymasters to ensure quantitative easing is not tapered too aggressively in order to facilitate further fiscal expansion. She will allow the FOMC to pursue their policy goals and she has pledged to allow market forces to determine the exchange rate. 
Fed Chair Powell is not worried about elevated equity valuations as a threat to  economic stability. Other monitored sources of financial stress are currently not indicating signs of strain, thereby allowing the FOMC to focus on their economic goals.

Prior to the arrival of COVID-19, support for aggregate demand from fiscal policy had been extremely unreliable, thereby making it virtually impossible for the Fed to restore pre-Great Recession policy settings. Recent fiscal stimulus and the likelihood of further measures have, however, raised the spectre of the Fed having to respond to economic overheating risks sooner-than-expected.
Fed Chair Powell rules out the possibility of economic overheating in 2021 due to the absence of any semblance of broad-based economic strength currently embedded in data. In contrast to previous cycles, inflation will have to overshoot the 2% target before the federal funds rate is increased, but the Federal Open Market Committee (FOMC) is reluctant to embrace a rule-based approach in this particular realm due to their desire to retain flexibility.
Treasury Secretary Yellen respects the Fed's legal independence, but she may face political pressure from her new paymasters to ensure quantitative easing is not tapered too aggressively in order to facilitate further fiscal expansion. She will allow the FOMC to pursue their policy goals and she has pledged to allow market forces to determine the exchange rate. 
Fed Chair Powell is not worried about elevated equity valuations as a threat to  economic stability. Other monitored sources of financial stress are currently not indicating signs of strain, thereby allowing the FOMC to focus on their economic goals.     

Fed Downplays Economic Overheating and Equity Market Risks: Focus on Unemployment and Low Inflation