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.

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Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Macroeconomics

<p>Despite concerns of excessive fiscal stimulus, observers are resigned to the Fed allowing the economy to "run hot" in its aftermath without any monetary offset. Investors need to remember Fed policy is data dependent and that there is still sufficient economic slack to assist the riskier segments of the capital structure before any tightening measures are undertaken.</p>
<p>Structural headwinds have offset cyclical  forces to prevent rising US inflation in recent years, but it is still uncertain whether these restraints can counter sustained Modern Monetary Theory (MMT) by the Fed and US Treasury. Future trends in the velocity of circulation of money will determine whether expansion of monetary aggregates translates into rising prices. Japan provided the Fed with an example where significant and sustained economic stimulus did not produce inflation due to arrival of deflationary psychology. </p>
<p>The recent behaviour of inflationary expectations has defied predictions, which, in turn, were based on historic perceptions of slow declines and rapid increases. Inflationary expectations failed to rise materially during the two most recent economic expansions, thereby indicating the arrival of stubborn deflationary psychology that also fundamentally altered the relationship between equity prices and bond yields.  The current rise in US Treasury yields does not constitute a full-blown repeat of the 2013 taper tantrum. </p>
<div>The Federal Open Market Committee (FOMC) announced that socially inclusive metrics will form part of their framework for assessing labour market conditions, raising the prospect of policy being kept looser for longer if inflation remains benign. Incoming economic data in 2021 H2 will crucial for investors in determining whether the Fed will be forced to change their expected dovish policy path in 2022.  </div>

Despite concerns of excessive fiscal stimulus, observers are resigned to the Fed allowing the economy to "run hot" in its aftermath without any monetary offset. Investors need to remember Fed policy is data dependent and that there is still sufficient economic slack to assist the riskier segments of the capital structure before any tightening measures are undertaken.
Structural headwinds have offset cyclical  forces to prevent rising US inflation in recent years, but it is still uncertain whether these restraints can counter sustained Modern Monetary Theory (MMT) by the Fed and US Treasury. Future trends in the velocity of circulation of money will determine whether expansion of monetary aggregates translates into rising prices. Japan provided the Fed with an example where significant and sustained economic stimulus did not produce inflation due to arrival of deflationary psychology. 
The recent behaviour of inflationary expectations has defied predictions, which, in turn, were based on historic perceptions of slow declines and rapid increases. Inflationary expectations failed to rise materially during the two most recent economic expansions, thereby indicating the arrival of stubborn deflationary psychology that also fundamentally altered the relationship between equity prices and bond yields.  The current rise in US Treasury yields does not constitute a full-blown repeat of the 2013 taper tantrum. 
The Federal Open Market Committee (FOMC) announced that socially inclusive metrics will form part of their framework for assessing labour market conditions, raising the prospect of policy being kept looser for longer if inflation remains benign. Incoming economic data in 2021 H2 will crucial for investors in determining whether the Fed will be forced to change their expected dovish policy path in 2022.  

Outlook for US Treasuries and Fed Policy: Beware the Lingering Legacies of Deflationary Psychology