With a few new Central Bankers settling in, and the UK about to select its new Governor, the uncertainty around their next move remains. Earlier this week we discussed the few specific ways to make QE work, given it now seems inevitable – now we look at how politics might play with fiscal stimulus. We also feature a great analysis on why the Philips curve is still relevant and why the Fed should do all it takes to foster expansion.

Can Tariffs Have a Deflationary Impact? (The Library of Economics and Liberty) Not all tariffs are inflationary. Famously, the Depression-era Smoot-Hawley tariff reduced aggregate demand by enough to offset any inflationary impact. It contributed to causing the Great Depression. Bearish growth and equities.

Objectives and Boundaries of Monetary Policy: A Governor to Renew the Bank of England’s Monetary Vows (VOX) Warns thatthe credibility of central banks gained after decades of hard work could be unwound by a new era of economic populism. This could be accelerated by central banks issuing short-term debt to help the governments fund their spending sprees. Suggests yield curve steepening.

The Phillips Curve: Dead or Alive (VOX) Argues that the Philips curve, which links employment to inflation, is not dead as many believe but just in hibernation. It will wake up – this has happened before in the 1960s  and history could repeat. Recommends the Fed’s to keep the economic expansion going, especially as unemployment could fall below natural rate estimates. Bulish rate markets.