This article is only available to Macro Hive subscribers. Sign-up to receive world-class macro analysis with a daily curated newsletter, podcast, original content from award-winning researchers, cross market strategy, equity insights, trade ideas, crypto flow frameworks, academic paper summaries, explanation and analysis of market-moving events, community investor chat room, and more.
WHAT CDS MARKETS ARE DISCOUNTING (Variant Perception, 1 min read) CDS pricing could be reflecting the expectation that central banks will ultimately monetise recent fiscal stimulus. Hence, CDS pricing demonstrates the probability of a traditional credit event occurring (failure to redeem or pay coupons, debt restructuring ) rather than a full default.
Post‑Pandemic Interest Rates: Lower for Longer (Advisor Perspectives, 5 min read) A combination of a large private sector saving glut and implicit or explicit nominal yield curve control by central banks will keep interest rates lower even after the pandemic is over. The history of pandemics, interest rates over the past seven centuries and previous recessions all support this thesis.
Understanding Helicopter Money(MPRA, 7-page read) Article emphasis that helicopter money should be directed to affected firms to be more effective. This type of monetary policy should be avoided in normal times, but it might yield beneficial results in the current state of the European economy to stabilize unemployment rates in short-run.
Central Banks Can “Magically” Prevent Disinflation (Econ Lib, 6 min read) Article highlights how inflation in 2021 and 2022 is also likely to be weak and stand below 2%. Primarily due to the supply shock. NGDP level targeting or price level targeting (along a positive 2% trend line) should be adopted by the Fed to avoid deflation within the economy.