Ed Ed Harrison, ECB, Chief Economist discussed on Adventures in Finance: A Real Vision Podcast
Matched Bennington in new. York joined shortly by Ed Harrison from Washington DC, but first here's Jack. Farley with the store is driving markets. US! Equities continue to March upwards in dissent. The won't seem to end the S. and P.. Five hundred is now within one percent of where it began year in January and shockingly every single stock in the index is up since the lows on March twenty third every single one, but stocks aren't the only way investors are betting on a v-shaped recovery Morgan. Stanley announced in a note on Friday wager on a significant steepening of the yield curve, the reported a correlation between the plot and a thirty year one month spread, noting that yields tend to compress as the. The target rate goes lower, so it's essentially an anti T. it'll be interesting to see had his out going forward, speaking of bonds spread between German boons, and the sovereign bonds of Italy Spain and Greece have narrowed significantly in light of the European, Central Bank's announcement, a sustained stimulus while ECB's generous benefits package has tempered the bond markets of southern Europe it's provoked fears in the north of inflation and moral hazard, several prominent German economists have come out denouncing the package arguing that ECB president Christine Lagarde is a huge risk by doubling down on stimulus while the money. Money supply is at the highest point. It's been since the launch of the euro. Don't you think former chief economist Thomas Maier argued that Europe is headed for a constitutional crisis because the ECB quote has no legal or democratic mandate for what it's doing. And Meyer is by no means the only critic. There's also Otmar issing former ECB. Chief Economist who added his critique as well as Professor Richard. Werner added to these worries about inflation, our concerns about moral hazard, a disproportionate amount of stimulus would be allocated to Spain in Italy which are heavily indebted nations within the. The euro zone, so there's a worry that this bailout package would incentivize fiscal productivity, so the Hawks have their talents out, but the dubs definitely have some arguments in their arsenal with CPI in the euro-zone, just at zero point, one percent having declined for four straight months and forecasted growth within the euro zone, seemingly apocalyptic with the Bank of Spain, having forecast to GDP for Q to contract a stunning twenty one point, eight percent, and even Germany output slumped seventeen point nine percent for April, so it'll be interesting to see whether these tensions resolve or exacerbate going forward. And with that, let's go back to ash and Ed Ed Harrison back from vacation in in your rightful seat on a Monday afternoon. Welcome back Ed..