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>According to the National Bureau of Economic Research (NBER), the Great Lockdown was the shortest in US history, thereby raising questions about the necessity of continued stimulus, notably by the Fed, but employment remains well below its previous cyclical peak. The economy is displaying some late-cycle signals that are historically associated with impending overheating, but US Treasury investors are discounting a significant slowing in economic growth and, consequently, reduction in inflationary pressures.</p>
<div>Recent US inflation overshooting is partly related to supply chain dislocations caused by different COVID-19 vaccination policies adopted by sovereign governments and disruption to global trade, but pressures due to the latter could persist for the remainder of 2021. Despite falling recently, congestion at US West Coast ports could rise further if vessels are forced to wait for cargo from exporters before returning to their point of origin under new laws being considered by Congress.</div>
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<div>Real-time data on the US economy shows continued recovery in consumer services in H2, although housing activity has been steadily cooling during 2021. Manufacturing activity remains buoyant, underpinned by robust consumer spending, but semiconductor shortages are holding back output and sales of automobiles.</div>
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<div>The recovery in revenues has significantly boosted US companies' financial health, thereby allaying last year's fears of excessive leverage when firms took advantage of the Fed's intervention in corporate credit markets. Meanwhile, a policy mistake by the Fed presents the biggest threat to the corporate sector, particularly a slow reaction to persistent upside inflation outcomes in 2022 H2 that forces more hawkish policy settings to satisfy bond investors' appetite for higher inflation-adjusted returns.     </div>

According to the National Bureau of Economic Research (NBER), the Great Lockdown was the shortest in US history, thereby raising questions about the necessity of continued stimulus, notably by the Fed, but employment remains well below its previous cyclical peak. The economy is displaying some late-cycle signals that are historically associated with impending overheating, but US Treasury investors are discounting a significant slowing in economic growth and, consequently, reduction in inflationary pressures.
Recent US inflation overshooting is partly related to supply chain dislocations caused by different COVID-19 vaccination policies adopted by sovereign governments and disruption to global trade, but pressures due to the latter could persist for the remainder of 2021. Despite falling recently, congestion at US West Coast ports could rise further if vessels are forced to wait for cargo from exporters before returning to their point of origin under new laws being considered by Congress.

Real-time data on the US economy shows continued recovery in consumer services in H2, although housing activity has been steadily cooling during 2021. Manufacturing activity remains buoyant, underpinned by robust consumer spending, but semiconductor shortages are holding back output and sales of automobiles.

The recovery in revenues has significantly boosted US companies' financial health, thereby allaying last year's fears of excessive leverage when firms took advantage of the Fed's intervention in corporate credit markets. Meanwhile, a policy mistake by the Fed presents the biggest threat to the corporate sector, particularly a slow reaction to persistent upside inflation outcomes in 2022 H2 that forces more hawkish policy settings to satisfy bond investors' appetite for higher inflation-adjusted returns.     

US Economy Enters H2 Robustly, but Fed's Outlook Being Increasingly Questioned by Bond Investors