Monetary Policy & Inflation | US
This is an edited transcript of our podcast episode with Dominique Dwor-Frecaut, published 25 March 2022. Dominique Dwor-Frecaut is a macro strategist for Macro Hive based in Los Angeles. She has been producing alpha generating trade ideas in FX and rates in EM and G10 at established and startup macro hedge funds in the US since 2011, including at Bridgewater. She has also produced in depth analysis of central banks policies and procedures drawing on her experience at the New York Fed, the IMF and the World Bank as well as on the buy and sell side. In the podcast we discuss, why structural inflation is still low, why the US will enter a recession, the unintended consequences of the Russia-Ukraine War, and much more. While we have tried to make the transcript as accurate as possible, if you do notice any errors, let me know by email.
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This is an edited transcript of our podcast episode with Dominique Dwor-Frecaut, published 25 March 2022. Dominique Dwor-Frecaut is a macro strategist for Macro Hive based in Los Angeles. She has been producing alpha generating trade ideas in FX and rates in EM and G10 at established and startup macro hedge funds in the US since 2011, including at Bridgewater. She has also produced in depth analysis of central banks policies and procedures drawing on her experience at the New York Fed, the IMF and the World Bank as well as on the buy and sell side. In the podcast we discuss, why structural inflation is still low, why the US will enter a recession, the unintended consequences of the Russia-Ukraine War, and much more. While we have tried to make the transcript as accurate as possible, if you do notice any errors, let me know by email.
Introduction
Bilal Hafeez (00:00:01):
Welcome to Macro Hive Conversations with Bilal Hafeez. Macro Hive helps educate investors and provide investment insights in all markets from crypto to equities to bonds. For our latest views, visit macrohive.com.
There are so many cross currents in markets right now from Fed hikes to the Russia-Ukraine war to the end of restrictions around COVID. We’ve therefore upped our analysis, and we’re providing more actionable investment ideas than ever before. In that context, we’ve released a new asset allocation piece where I go through, what are the best markets to be over or underweighting. My focus, in this latest report, is on which asset should perform well when the Fed is hiking rates. We’ll be updating this on a regular basis. We’ve also have had great feedback on our US recession model, which we’re now releasing on a weekly basis. The latest update is giving a 50% chance of a US recession in the next 12 months.
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Now, onto this episode’s guest, Dominique Dwor-Frecaut. Dominique is a Macro strategist based in LA. She’s currently working at no other than Macro Hive. Before that she worked at various hedge funds, including Bridgewater. Before the buy-side, she worked at the New York Fed, the IMF, and the World Bank. She holds a PhD in Economics from the London School of Economics. So, now onto our conversation.
So, welcome, Dominique. It’s always great to have you on the podcast show. We spoke last year, and a lot has changed since then. So, welcome.
Dominique Dwor-Frecaut (02:21):
Thanks, Bilal. I always enjoy chatting with you.
Why Powell and the Fed reacted late to inflation
Bilal Hafeez (02:24):
Great. Well, starting with the Fed, that’s really the big topic. Six or seven months ago, or even a year ago, the Fed seemed quite relaxed about inflation and growth and everything, and we’ve seen quite a dramatic pivot. Recently, the Fed has hiked rates. Chairman Powell gave a speech at the beginning of this week where he sounded quite hawkish, and now the market is pricing a significant number of hikes over the course of this year. So, what’s your explanation of why the Fed has pivoted so much over the last six months?
Dominique Dwor-Frecaut (02:53):
If I could rephrase your question Bilal, to me, the question is, why did it take so long for the Fed to react to high inflation, because the high inflation trend started exactly a year ago, and for years the Fed has continued to buy securities. The hawkish tilt has picked up pace, but we are just going through our first hike. It’s only 25 basis points.
If you look at benchmark like Taylor rule, Fed funds, it’s somewhere around 7%. The actual Fed funds is 30 basis points. So, to me, the interesting question is more, why did it take such a long time for the Fed to pivot? And I suspect it’s because they entered the pandemic with a strong belief in inflation inertia, that there had been indications of underperforming inflation, and they expected that to continue, and that’s why, in August 2020, six months into the pandemic, they inaugurated their new framework that was supposed to address persistent underperformance of inflation.
And what I find fascinating about this persistent underperformance and the new framework is that I can’t find, really, a good explanation from the Fed on this persistence of low inflation. So, in a way, with the new framework they tried to address something without going to the root cause of it. And in that sense, they were reacting to the proverbial “last war” rather than the coming one.
And you know how much I love to talk about my research, my obsessions. And what I’m writing about this week, and which I found absolutely fascinating, is the likely impact of Fed tightening cycle on growth. And one of the things I discovered, looking at the initial condition of each Fed tightening cycle, starting in 1960, there is really a pattern there. And you can see that the Fed in the 60s and 70s is starting each tightening cycle behind the curve, but for the following three decades, they are starting, actually, well ahead of the curve.
They start hiking when the Fed funds is already above the Taylor rule rates, when unemployment is above long-term unemployment, when the output gap is negative. Now, to be fair to the Fed, this could be that, based on the information available at the time, they didn’t realise that there was much more spare capacity than they thought.
Bilal Hafeez (05:50):
So, just to be clear, what you’re saying is, in the 60s and 70s the Fed was generally behind the curve relative to some model like the Taylor rule, but from the 80s onwards they started to move ahead of the curve. So, 80s, 90s, 2000s, they were ahead of the curve. So, what you are saying there is, that’s one of the reasons why inflation was so low?
Dominique Dwor-Frecaut (06:08):
Exactly. And one of the reasons why they felt the need to adopt this framework, and I believe the framework probably prevented them, this new average inflation framework, is probably one of the things that prevented them from reacting fast enough and why they are so far behind the curve. And trust me, I’m not an inflation hawk. I find that inflation expectations are suspect concepts. I’m not sure that we have a concept at all. They are certainly something that is very hard to measure.
But when you get too close to double digit inflation, and the headline CPI was, last month, 80 basis point, you multiply that by 12, you get to the double-digit inflation. And the reason why you might need to multiply buy 12 is that we’ve had a supply shock, a new supply shock with the war. So, I’d argue that month from month CPI is more likely to go up then down.
So, even for someone who tends to be dove, like myself, when you get to double-digit inflation, you really need to do something about it, otherwise you need … This is when inflation, historically, has accelerated once you cross the double digit threshold, and also you create all kinds of distortions. So, there was, I think, a case to react strongly, maybe six months ago, and to take a much more aggressive and proactive posture once the invasion of Ukraine started.
So, Fed is getting there, but it’s been getting there rather slowly, and in a way that has been rather confusing for investors. Certainly, for instance, our last set of economic forecasts is fairly inconsistent, as many people have pointed out.
Bilal Hafeez (07:53):
Okay. Yeah, understood. We’ll come back to the forecast there, but it’s a good point to remind everyone about their new framework that they had in 2020. It’s easy to forget that we had this new average inflation targeting framework, and it’s very fair that you’ve mentioned that that’s one of the reasons why they were late to react. Do you still think they have that framework, or have they abandoned it? And the reason I ask is because if they still have that framework, then that could mean that they need to keep breaks higher for longer if inflation, say, was using the other way around?
Dominique Dwor-Frecaut (08:20):
Well, yeah. Or, it boils down to whether you think that the reason for undershooting of inflation are still there once you get past the shocks, because imagine the key issue confronting the Fed at this stage is not so much whether they need to hike now. They need to, I don’t think anybody’s in denial anymore, it’s more how fast will they have to cut, which itself has to do with what happens after the spike in inflation and a very likely hard landing for the economy. So, I would argue that if we are back to the old underperforming inflation regime, there is much less of a reason to keep rates high for an extended period of time.
Bilal Hafeez (09:06):
Okay, yes. And you mentioned that the last Fed meeting, they had inconsistent forecasts. So, periodically, the Fed gives its on inflation and growth. So, why do you say it’s inconsistent?
Dominique Dwor-Frecaut (09:18):
Well, it’s inconsistent because first of all, they basically marked to market their inflation and growth forecast. They went for increasing inflation above 4% by the end of the year, but they adjusted the Fed funds rates by less, which means that if you look at the real Fed funds rates or the difference between the Fed funds rate and the Taylor rule, Fed funds rates to Taylor rule is just a simple rule of thumb that weighs the excess of inflation and unemployment relative to trend, and converts those excesses into an interest rate rule.
So, if you look at benchmark, which I agree, there’s nothing absolute about those benchmarks, but just to give an indication of where you are. The projection was for a lower real Fed funds rate or a bigger gap between the Fed funds rate and Taylor rule this time around and in December when the inflation picture has become worse. There was a big column from Larry Summers in the Washington Post. You know Summers, he likes to criticise everybody. But he made that point very forcefully. And even if he had not been Summers, any economist making those points would have strong credibility because it’s just plain logic.
Bilal Hafeez (10:37):
Yeah. So, essentially, what you’re saying is that, adjusted for inflation, the Fed, within their own projections, now is expecting a lower inflation adjusted policy rate at the end of this year than they have projected at the end of the last meeting. So, strangely they’ve become, in some ways, more dovish, if their worldview turns out to be correct?
Dominique Dwor-Frecaut (10:57):
Totally. And they’ve been called out since the meeting on that, and I think that’s why, on Monday, we had such a hawkish speech and Q&A from Powell, which I think, by the way, was organised ahead of time. But I think it’s hard to resist those points because they are so logic and so simple. And I think the Fed is adjusting, and I think actually it’s a really good news, long term, for the market and the economy.
Again, looking at the impact on growth of previous tightening cycles, one of the things that comes out very clearly is that the reason the recession of the early 1990s was so deep is that the Fed took such a long time to tighten. The Fed really didn’t tighten in earnest until Volcker was bought in. Inflation was already in the double digits.
Inflation had been accelerating since the end of the first all shock since the mid-70s. So, it took five years for the Fed to get in front of the curve, and that was devastating for the economy. I think we would all be much better served if the Fed was proactive, and we are getting signals from Powell that this may well be the case this time around.
Comparison to Volcker period
Bilal Hafeez (12:16):
And you mentioned Volcker. He’s, in some ways, the gold standard of central bankers when it comes to dealing with inflation. What would you make of Powell then, because it does seem, at least from the communication perspective, he’s, how should I say it politely, he struggled a bit. If you had to give a report card to him if you were his teacher or head headmaster or something, how would you grade him?
Dominique Dwor-Frecaut (12:36):
So, I’m going to preface my grading by saying that Chair Powell, like the rest of us, is trying to do their best, responding to a series of incentives. That said, I think, he’d probably score a five out of 10, which is, what is it, it’s a C?
Bilal Hafeez (12:54):
Yeah. It depends how generous the examiners are. Yeah. But it’s not great.
Dominique Dwor-Frecaut (12:58):
So, I think that we have a number of issues which predated Powell, but some which, I’m afraid, are his own. I think we have a big issue with Central Bank, they talk too much. There is this idea that Central Bank openness, transparency, is a good thing. Nah, that can be too much of a good thing, because the problem with central bankers talking all the time is that they convey much more certainty on the economies than they really have. And of course, markets love to hear central bankers talk because they have become so dependent on central bank policy.
So, there is this issue, in general, they talk too much, but I think it’s a bit worse under the Powell Fed, because we’ve had, for instance, FOMC members publicly discussing the final point of their normalisation strategy in public. And I think those discussions would much better take place behind closed door. And because I’m a nerd, I read things like transcripts from past Fed meetings, and in some of those meetings, you have Chair Yellen telling off, basically, her committee members and reminding them that what they say has a big market impact, economic impact, and that it’s better to keep the discussions inside of the FOMC. And I wholeheartedly agree with this view.
So, there is that. Then, I wish there was more of a framework to Chair Powell’s communications. For instance, Chair Powell, and to be fair, the surge in inflation that we are having is really a series of unfortunate events. And those of us who have kids will know what he’s been a bit unlucky. And he’s been taken to task, he’s had to explain, how could you let inflation over-shoot? This is a Congress that, only a few months ago, was praising Chair Powell to high heavens, and now he is being taken to task for his poor performance.
So, his view has been that it’s been basically supply shocks, and that the traditional textbook model didn’t work. But what was missing, in my view, from that explanation, is a demand shock. A year ago when the Administration came in with its American Recovery Plan, I was completely wrong-footed, because I expected a much smaller plan since the official purpose of this plan was COVID relief. And at the time I wrote, “This is not COVID relief. This is a plan to run the economy hard for an extended period of time.”
And I think there was a bit of an attempt at social engineering there, because the view prevailing at the Fed and, to use a bit of a DC slang, in the “blog”, which is the democratic policy establishment, was that a hard economy benefited minorities and low-income Americans. So, I believe the Administration’s Recovery Plan was basically creating a positive demand shock.
And in my view, that explains why the supply shock didn’t turn out transitory per the typical textbook model where the central bank basically looks through it. So, I wish Chair Powell had been a bit more forthcoming in telling us about the role played by this fiscal policy induced supply demand shock, positive demand shock. So, that’s another part, another aspect, I think the other aspect of my five out of 10.
Bilal Hafeez (16:35):
Yeah. Do central bankers ever comment on fiscal policy or not?
Dominique Dwor-Frecaut (16:39):
Well, that’s the thing, they are independent. And being independent means that they have to call a spade a spade. And I would say in the case of the Fed, Chair Powell has been extremely careful. That said, at the beginning of last year he called for more fiscal stimulus. He may have gotten more than what he bargained for, but he didn’t make it clear at the time. And it’s a pity because I think somehow it undermines the Fed credibility.
How strong is the Fed board?
Bilal Hafeez (17:09):
And within the Fed team, the board members or even the regional members, who do you think is the intellectual powerhouse? We had Clarida. He was, you could call the intellectual. Maybe Brainard as well. Obviously Clarida stepped down. Who would you say are the intellectuals of the board that’s setting the theory and the frameworks?
Dominique Dwor-Frecaut (17:28):
So, we have intellectuals, we have PhD economists, we have Brainard, as you mentioned, we have Williams at the New York Fed. The problem is, what we need really is a PhD economic who can translate the economic view into a market view, which is a bit the holy grail, as we know, even for us researchers. And Clarida was that. And now that Clarida has gone, there is really no one. We just have a bunch of PhD economists sitting on top of 400. It’s as many there are in the reserve system.
And I have to say, one thing that I really admire with Chair Powell is, when he says, “We have to be humble in how we present our understanding of the economy.” But I’m not seeing this same humility with the PhDs in the system. There is a monolithic view of the economy, and a difficulty to say, “I don’t know,” which I think has informed a lot of the recent policy mistakes by the Fed, frankly.
Bilal Hafeez (18:36):
And in terms of the new board members that were going before Congress, what’s your take on the new members, assuming they all get through?
Dominique Dwor-Frecaut (18:44):
They’ll probably get through. I think we are getting more PhD economists. And look, there’s nothing wrong with being a PhD economist. I have to confess, I have one myself. I am one myself. But I think it’s important to look at the data before you look at your model, and use your model as a decision aid, something that may or may not throw light on the data, but you really need to keep an open mind. And the thing is, when you are in the markets, as I am, you get constant feedback. If you are wrong, everybody finds out right away.
So, it forces you to go back and think about what was wrong with the model, what did I miss. And the problem with academic/bureaucrats is that they rarely get that sort of feedback, if ever. There was never a questioning of the Fed not seeing the crisis coming, of their handling of the crisis, that never happened. And not getting feedback is really bad for your learning.
Hard landing is needed to bring inflation down and why the US labour market is weaker than many think
Bilal Hafeez (19:46):
Yeah. I hear you there. And you earlier you mentioned “a hard landing”. You said that the Fed would hike and would lead to hard landing. Can you elaborate more on that? So, you’re actually calling for a recession?
Dominique Dwor-Frecaut (19:55):
I think so. So, this is work in progress, and I do hope that our listeners will read my notes on this topic. But yes, given where we are, given that … What is a supply shock? It’s basically something that takes out a good chunk of the economy, takes it out of line because it’s no longer profitable. In Europe, for instance, we are seeing truck drivers, in Italy and Spain, going on strike because they say “We can’t make money at this levels.” This is what the supply shock is.
So, it means there are fewer goods and services to purchase in the economy. So, the only way to reestablish balance, since supply is fairly inelastic in the short term, is to bring down demands. And that’s where we get the hard landing. Also, the fact that the Fed waited so long to tighten, and it’s just starting, I think is adding to the risk of a hard landing. So, yeah, recession end of this year, next year, is my base case.
I would also add that I think the economy is going to surprise everybody by its limited resiliency. One thing which is really baffling me, and I’ve looked around for people making my point about the labour market, which is, yes, it is true that vacancies or job openings are multiple of the people looking for a job. But if you look at actual hires as a share of job openings, it is at a historical low. It’s never been so low, which means firms are advertising jobs, but they are not hiring.
And actually, you have some categories of workers, older workers, who are complaining of not being able to find jobs, or workers complaining about not getting enough hours. And you don’t see a decline in the percentage of part-time worker for involuntary reasons, which tells you that the labour market is not that tight after all. So, my suspicion is that once we start demand falling in earnest, we are going to discover that the market that we thought was the tightest, the labour market we thought was super tight, actually is not that tight, and we are going to see a fast move down in growth.
Bilal Hafeez (22:24):
Yeah, I was going to just ask, there are some positive signs in the economy. So, people often talk about the CapEx cycle seems to be quite strong. Would you agree with that? Would that be enough to offset some of these other factors?
Dominique Dwor-Frecaut (22:35):
Unfortunately, no, because CapEx is such a small share of GDP. Also, the CapEx cycles that we have has a lot to do with automation and substituting capital to labour. And if you also think about the CapEx cycle, we still don’t know what the impact of the increase in corporate debt is going to be on the economy, whether there is any risk that firms could find themselves struggling to service their debt once interest rate go up. And that is going to impact, of course, CapEx and demand for labour.
So, definitely, CapEx has been a bright point, but it’s too small. So, US economy is 70% consumption. So, once consumption starts contracting, I don’t think CapEx, even if CapEx is decoupled for consumption, because it’s more about changing the nature of how businesses are run, I don’t think it’s going to be enough to offset the contraction in consumption.
What happened to the rebound in the services sector?
Bilal Hafeez (23:39):
Then, on the consumption side, what will happen to the big services reopening bounce in consumption? Has it happened in the way you would’ve expected, or where are we on that?
Dominique Dwor-Frecaut (23:48):
Not at all. And that’s one reason for pessimism is that, coming into this supply shock and into this bad tightening cycle, we didn’t have a big burst in those services consumption. We could see, and you can see it with the latest number, that consumptions of goods is falling, in the real terms. So, we have a contraction, especially durable, which makes sense, because household goods, so many durables during the pandemic, but services consumption is not increasing fast enough to make up for that contraction.
And when you look at it in terms of household income, you can see that real household income has been contracting for the past about six months because you no longer have government transfers, and then you have inflation and wages that are not nominal wages that are basically stable to falling. So, you have low but steady real household income contraction, and that’s with 400,000 increase in jobs monthly. But when we go to zero, we’re going to have a fairly nasty contraction.
Plus, the things that has been keeping the economy going so far is household, they did much less, but the household savings rate is now well below the pre-pandemic savings rate. So, probably cannot go down much further, and that’s another reason to expect a hard landing next year, because in my view, the economy is nowhere as strong as the Fed tells us it is.
Household savings
Bilal Hafeez (25:19):
Could consumers dip into their stock savings. So, they’re saving at lower rates of their income than before, but then they build up this excess savings, so they have a pot of savings that they could dip into, perhaps, which could fuel consumption. Do you think that could work?
Dominique Dwor-Frecaut (25:34):
That actually would mean that the flow of savings would be negative, which has been very rare, hasn’t happened. So, savings rates is still about between six and 7% of disposable income. I think some of that is happening for some of the households. So, probably, low income households that were compensated the most by the government’s American Recovery Plan, I think those probably have negative savings. But on the other hand, higher income households who kept their job because typically they had jobs that could be done from homes, those didn’t have much of a deeper income, and kept their savings rates high. So, net-net, we still have a positive average household savings rate.
Why the US will enter a recession
Bilal Hafeez (26:22):
So, given this view that you have high inflation now, the Fed has to hike, and then recession first half of next year, end of this year, what do you think will be the Fed’s path then? How many hikes will they do for the rest of this year? Will they start cutting next year? How do you see the profile?
Dominique Dwor-Frecaut (26:40):
So, for this year, eight hikes are not unthinkable. I think the Fed is very much going to be driven by inflation print. So, eight is feasible. In terms of next year, I think they will be reactive to inflation. They will want to see inflation clearly back to target before easing. So, one thing that this job has made me is very humble about my ability to predict the future. So, we cut maybe in the latter part of next year, based on my expectations that the decrease in growth is going to surprise everybody. So, the Fed maybe could start the easing at the end of next year. That’s possible.
So, it would be a fairly short recession, but usually US recessions are short, a few quarters. The reasons the recession of the early 80s lasted so long is that the Fed dragged the tightening for such a long time, and then, in the end, had to really slam the brake very hard. And I’m hoping we are not there. So, scenario I’m describing is one where the Fed is proactive, and then the pain is going to be short term. But if I’m wrong, and if we end up in a late 70s scenario in terms of Fed policies, then the recession is going to last longer.
Bilal Hafeez (28:04):
Yeah. And you mentioned 70s. Many people are making parallels to the 70s today because we’ve had these oil shocks and people are talking about inflation. Do you think the 70s are a correct reference point for us or not?
Dominique Dwor-Frecaut (28:17):
Also, on the oil shock, not really. First of all, really, what’s made a difference this time around is a positive demand shock. If you look at the monetary fiscal policy mix in the US, there has always been a tendency to not use the fiscal, and over rely on monetary policy. That’s certainly what happened after the GFC. And what really makes this episode unique is the incredible fiscal impulse we’ve had.
Also, I think the economy is very different from the 70s in a structural way, in the sense that businesses have much more market power, and workers much less market power today than in the 70s. And the strange thing is the market power translated in low inflation because of where this monopolistic economy works. You have a few dominant firms, like Amazon, that imposed low prices on their suppliers, and their suppliers could not find enough alternatives to purchase their goods.
So, they had to abide by these very low prices, and so we had market power with a strongly monopolistic economy with market power, with very high profit margins, and that equilibrium was completely disturbed by the supply and demand shock. But I think we are going back to it once we are through the recession, and I think that’s a big difference with the 70s.
Why structural inflation is still low
Bilal Hafeez (29:46):
And presumably, your longer term inflation view is not that we are entering a new higher inflation regime. So, can you just go through the arguments for a low inflation regime from a structural perspective? So, one is, you still have large market power by large companies. So, that’s one factor, which is different from the 70s, which argues for lower structural inflation. What other arguments would you have?
Dominique Dwor-Frecaut (30:12):
So, I think, really two. One is demographics. If you look at the relationship between population growth and inflation, it’s actually quite strong, but it is fertility parts of the population growth that’s important as a driver of inflation, and also as a dependent part. In other words, if you do a bit of quantitative work, you see a much stronger relationship between the ratio of a young dependent in the population and inflation than between inflation and demographic growth.
I hope readers will refer to one of the notes I published on this topic. There is a chart there that’s quite striking. And population growth has collapsed. In the US, the fertility rates we had in 2020 was the lowest on record since the 1930s. And there have been polls done to ask people, “Why are you not having more kids?” And they say it’s too expensive and uncertainty, and they have no intention of having more … “We are not having more children once the pandemic is over.” So, post-pandemic, baby boom is highly unlikely.
So, that’s one. The second one, I think, is financialisation. So, what is financialisation? It’s when you have a stronger demand for financial assets than for economic assets, like buying more factories or even buying more consumer durables. And the financialisation is a super strong trend that reflects a number of things. So, income inequality is up there because household with higher income has a higher propensity to save, and saving is basically a demand for financial assets.
So, when you have high inequality, you have this inbuilt tendency for incremental income to go to purchase financial assets rather than real assets. So, there is that. There is also monetary policy, which, in my view, has been quite, I don’t want to use the word “disaster”, but certainly has benefited Wall Street much more than Main Street, and added to wealth and, probably, income inequality.
What it’s done also is to juice up the return on financial assets relative to real assets. Basically, central banks have been pushing on a string to try to address structural disinflationary trends through monetary creation, and all it’s done is push up financial asset values rather than raise inflation in a sustainable manner. And I would even argue that, intuitively, if you have low interest rates and you’re trying to save to fund your retirements, obviously you have to save more. You have to save more with low interest rates than with high interest rates if you have a target retirement income.
So, all of those things, to me, suggests that these hyperactive monetary policies that we’ve had has actually added to disinflation rather than raised inflation. And that policy is not going away anytime soon, certainly not to the Fed board that we are going to have. And that’s one of the reasons, I think, once this cycle of inflation recession is over, we’re going back to underperforming inflation.
Unintended consequences of Russia-Ukraine war
Bilal Hafeez (33:43):
Wow. All quite sobering points that you’ve made here. Finally, let’s just have a look at the rest of the world. When you look at, say Europe, do you have any thoughts on Europe, because obviously we have the war going on, there’s also the energy shock that Europe’s facing, we have ECBs struggling to lift up policy rates. What’s your take on a region like Europe?
Dominique Dwor-Frecaut (34:03):
Even though I’m a European myself, well, half European and half American, I had been very sceptical of the Euro projects since day one. No more. I think Putin has done more to bring Europe together than 70 years of Shindi think tanks, high level meetings of all kind. I think we have much more of a sense of political unity and common purpose on Europe. And for the first time I am thinking that, actually, the Euro is probably here to stay.
Bilal Hafeez (34:36):
Okay. Okay. Wow. Quite a big statement there. Okay. Well, with that, let’s wrap up the conversation. We’ve covered a lot of ground. You’ve had some quite provocative views, which is great. And what’s the best way for people to follow you.
Dominique Dwor-Frecaut (34:48):
It’s very simple. Macrohive.com. If you don’t have a subscription, you absolutely should get one. It’s not just me, but there are lots of really interesting and provocative people writing there. So, strongly advise our listeners to subscribe.
Bilal Hafeez (35:05):
Great. And they’ll appreciate that, Dominique, of course. Well, with that, thanks a lot, and, obviously, have a good rest of the week as well.
Dominique Dwor-Frecaut (35:11):
Thank you, Bilal.
Bilal Hafeez (35:12):
Thanks for listening to the episode. Please subscribe to the podcast show on Apple, Spotify, or wherever you listen to podcasts. Leave a five-star rating and a nice comment. Let other people know about the show. We’d be really grateful. Also, sign up to become a member of Macro Hive at macrohive.com. We’ll be back soon, so tune in then.