William De Vijlder

Group Chief Economist BNP Paribas

Tag : Federal Reserve

The dots drive the dollar

The dots drive the dollar

The behaviour of Wall Street hasn’t exactly been exciting in recent weeks. The big move came on Wednesday 20th. It was all about the dots, the indications given by the FOMC members about the expected path for the federal funds rate.

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New monetary season

For the financial markets, summer’s end is often the occasion for deep-felt upheavals. This summer, investors left on vacation filled with trepidation about the economic impact of Brexit, about robust job creations in the US and how they might change monetary policy prospects, and about the outcome of European banks’ stress tests.

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How to make the most of economic forecasts

Comparing previous forecasts with actual results can be a source of frustration. This was certainly the case concerning oil prices in 2015. For users of these predictions, enormous spread underscores the importance of understanding the forecasters’ level of confidence.

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Dichotomies dominate the global economy

In recent months, the financial press has provided extensive coverage of the Chinese growth slowdown, the hesitations of the Federal Reserve to hike or not and the decisiveness of the ECB to ease more if need. They are a reminder of the dichotomies which characterise the world economy. To visualise this, the following chart uses […]

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Does the euro influence export expectations?

The recently released IFO survey of German export expectations has shown a continuing downward trend which started in the spring of this year. Since mid-March, the euro has strengthened against the US dollar, admittedly with a great deal of volatility. Based on economic theory, it is tempting to see a causal relationship between the two developments: a stronger (weaker) currency would weigh on (boost) exports, something which would be reflected in the assessment by companies of their export opportunities.

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Bye bye winter

According to the calendar, spring is just around the corner, but for the eurozone economy, the season is already well underway.

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Monetary policy is like driving on ice

Driving on an icy road is tough and requires lots of experience. If you’re too abrupt, the car spins out of control; if you’re too hesitant, the car won’t go anywhere. This image can be applied to monetary policy, which has become a particularly delicate undertaking.

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The markets under the sway of the central banks

Although it is a panoply of factors that theoretically dictates market behaviour, monetary policy is what actually sets the tone. So far, its dominant influence has supported the markets, but in the future, it is likely to be less one-sided. This certainly applies to the US, but it could also be true for Europe if it turns out that the markets reacted too optimistically to Mario Draghi’s statements.

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