Does hiking off reputational concerns now expose Lagarde to the risk of a “Trichet moment”? For sure, ECB communication around the rationale for hikes has been confused (and confusing). www.bloomberg.com/news/article...

Kevin Warsh takes over the Federal Reserve today. He inherits an energy shock and Jerome Powell, who stays on the board. Warsh’s view of Al as "structurally disinflationary" may turn out to be right as concept but wrong on timing. It will be interesting to watch. www.instagram.com/p/DY0JubCkd9...

🇺🇸 🇨🇳 The world’s two largest economies meet. On the agenda: investment, Taiwan, tech, Iran and - obviously - tariffs and trade. www.instagram.com/p/DYSHkNCjOV...

The European Commission published its energy crisis plan (AccelerateEU) which is being discussed at the summit of EU leaders taking place on April 23/24. Read more ⬇️ www.instagram.com/p/DXhCOdJjLm...

As the Strait remains closed, jet fuel prices are the first line of disruption. Read more at ➡️ www.instagram.com/p/DXWtCE9DNY...

Three recent prominent books in economic policy, which I liked reading and recommend. Full discussion at: www.instagram.com/p/DXRhDGxDLB...

Two striking findings from the IMF World Economic Outlook just published - looking at who pays the cost of war and how big the macroeconomic impact of conflicts is. Full explainer on my IG ➡️ www.instagram.com/p/DXMUoKqDLh...

NEW: The theory that the dollar's status as the world's dominant reserve currency is a main driver of America's large & persistent current account deficits is wrong, Maurice Obstfeld writes.

US March CPI recorded the largest monthly jump since June 2022 - entirely driven by energy. At the same time, consumer confidence hit a historic low and nominal wages grew at the slowest pace since May 2021. The Iran shock is squeezing real incomes, and putting the Fed in a difficult position.

Is this the same Commission who argued it was imperative to scale back the EU sustainability regulatory framework via the Omnibus, because green tape was supposedly killing European competitiveness?

A wild day in energy markets, with Brent breaking through $119 before dropping below $90 on Trump’s comments hinting at a potential offramp. The conflict has pushed oil prices almost 30% above baseline - to be seen whether this reversal proves stable.

Want to know why Europe lags in innovation? Exhibit 1: less than 5% the EU Innovation Fund established in 2021 has been paid out, because companies spend up to 3’000 hours and an average 85’000€ in administrative costs to apply. Economic death by paperwork. www.ft.com/content/0797...

The fifth #CERditchley panel, chaired by Yasmine Moezinia was on ‘Will Europe risk its (capital) markets taking off?’ with Agnès Bénassy-Quéré, @smerler.bsky.social, @erikfossingnielsen.bsky.social and Alexander Plekhanov

The 10 year BTP-Bund spread is at its lowest since 2010 and Italy in 2024 went back to a primary surplus, as it consistently did for almost two decades before COVID (unlike France, who’s been overshooting its deficit forecasts for 30 years). Don’t cry wolf where there isn’t one, it’s irresponsible.

#Bruegel is republishing the classics and I’m super proud that this paper by @pisaniferry.bsky.social and myself made the cut. It took a lot of work on then-obscure central bank liquidity data, but it changed the way we look at capital flows within monetary union. www.bruegel.org/policy-brief...

Thank you to Jon Hay for featuring my comments in this extensive article on the UK’s decision to scrap plans for a Green Taxonomy. Great insights also from the other people quoted in the piece! www.globalcapital.com/article/2f2q...

My latest, on the recent notice by the European Commission on defence investment in the sustainable finance framework.

The international monetary system is changing before our eyes. Germany and Italy pressed to bring gold home from US; a survey of more than 70 global central banks showed more were thinking of storing their gold domestically amid concerns about ability to access it. www.ft.com/content/e393...

Great piece by @martinsandbu.ft.com in today’s FT. As I wrote back in April, the EU’s best response to Trump’s tariffs would be to issue more EU debt. My preference however is for ramping up genuine EU debt issuance, not settling for synthetic asset solutions. www.bruegel.org/first-glance...

The return of volatility: the S&P 500 has gained or lost at least 1% in seven of the past 10 sessions, and April is poised to be the most-volatile calendar month since the Covid crash in 2020. www.wsj.com/finance/stoc...

ECB’s Guindos Says Euro May Become Alternative Reserve Currency ‘in Some Years’ - but that will require “additional integration” he says (and a step up in EU issuance, says I) www.bloomberg.com/news/article...

Latest US inflation numbers surprised to the downside, but the University of Michigan survey points to 12-month inflation expectations at 6.7%, and above 4% for the next 5 years. Powell previously dismissed it as an outlier, but important to watch for role of the $. www.reuters.com/markets/us/u...

It may seem counterintuitive to issue more debt during a crisis. But in a world where US economic policy is unpredictable, safe asset diversification suddenly has value. And the EU’s best response to US tariffs is to issue more debt. My OpED at @bruegel.bsky.social www.bruegel.org/first-glance...

"The EU should thus move to fund the entire cost of its planned rearmament with EU debt, similarly to NGEU." @smerler.bsky.social on the global role of the euro in light of American chaos. www.bruegel.org/first-glance...

All eyes in the market are on China. So far, China is going for a strategy of being the adult in the room: *US TARIFFS A HEGEMONIC MOVE, SELFISH: LIN *US TARIFFS DEPRIVE GLOBAL SOUTH OF RIGHT TO DEVELOP, LIN SAYS *NATIONS SHOULD OPPOSE PROTECTIONISM, LIN SAYS

Dollar down on a massive trade protectionist shock is something that will go in the macroeconomics handbooks for the next generations: *EURO RISES MORE THAN 1% TO $1.0980, HIGHEST LEVEL IN SIX MONTHS

Ma tribune dans L’Opinion, sur les implications du paquet Omnibus pour la finance durable ⬇️ www.lopinion.fr/internationa...

🔎 I’ve been asked many times whether EU sustainable finance rules are holding back EU defence financing. The short answer is that the regulatory constraints are not that tight, but self imposed reputational restrictions are tighter. The longer answer is ⬇️ www.bruegel.org/analysis/sus...

Many thanks to Philippa Nuttal for featuring my thoughts in her must read @sustainableviews.bsky.social piece on the Omnibus. The bottomline is that sustainability-minded investors have reasons to be worried. www.sustainableviews.com/eu-omnibus-t...

The narrative for markets going into the US election was that Trump may be bad for the world, but was certainly good for America. That’s starting to change, as massive policy uncertainty threatens the myth of American exceptionalism. 🧶 1/ algebris.com/algebrisbull...

Chronicle of a death foretold.

German Bund reacts to the historic announcement of up to 800€ billion in military and infrastructure spending - which quite frankly trumps the EU RearmEU plan.

🔎 Streamlining or hollowing out? The implications of the Omnibus package for sustainable finance In this @bruegel.bsky.social First glance I highlight two key risks for both the European Green Deal and sustainable finance present in the first Omnibus package. 🔗 buff.ly/eKbn6t2 #EconSky

So far, Taxonomy-linked green bonds have been largely issued by already green companies, in sectors where demonstrating greeness is easier. In my view, this shows the Taxonomy framework doesn’t lend itself naturally to be used for transition finance. #Econsky 🔗: www.bruegel.org/policy-brief...

‼️ How to improve the EU’s sustainable finance framework In this @bruegel.bsky.social Policy brief, I look at market data and identify weaknesses that risk undermining the EU's sustainable finance framework. I also offer 5 recommendations for improvement. 🔗 Available now! buff.ly/41eSpDy #EconSky

“The US innovates, China replicates, Europe regulates” has become a catchphrase among those bemoaning Europe’s weak growth. How should Europe respond to the wave of anti-ESG backlash that is underway in the US? My 2 cents here @bruegel.bsky.social www.bruegel.org/first-glance...

Equity futures down following the announcement of US tariffs on Mexico, Canada and China over the weekend. The euro also not liking the idea that Europe will most likely be next on the list.

As incoming US President Trump calls for Canada to join the US and doesn’t rule out taking Panama and Greenland by force, how should Europe respond? The best piece I read today is this one, by @pisaniferry.bsky.social and @gpapak.bsky.social ⬇️ www.project-syndicate.org/commentary/g...

The gap in performance between the S&P 500 and the S&P Global Clean Energy, which opened up with the rates hikes, widens further towards the end of the year as uncertainty grows on the global green policy drive.

An interesting element that doesn’t get nearly enough talk is the extra-territoriality of EU climate regulation. Foreign firms will be brought in scope of CSDDD if they work in the value chain of EU firms. That can have major political implications. Here’s e.g. Qatar not being very subtle about it ⬇️

In an environment where politicisation and ideological polarisation on sustainable investing keep growing, the policy gap between the two side of the Atlantic seems bound to widen. www.ft.com/content/f19c...

Poll run by Le Point shows 54% of respondents want President Macron to resign and a presidential election to take place in 2025. This is going to get interesting… www.lepoint.fr/politique/ex...

Things you don’t see everyday: on the fall of Barnier’s government, the French yield curve moved above the Greek one, all the way up to the 10y.

Follow the @bruegel.bsky.social crowd down here ⬇️💙

Someone didn’t get Macron’s memo on herbivores and carnivores! Or, she’s politely telling the French they should accept that buying US defence is inevitable, if Europe is to meet spending targets within a reasonable timeframe, so why not use it as a trade bargaining chip. www.ft.com/content/24d5...

Cosa preoccupa i mercati e cosa preoccupa gli economisti, dopo il risultato delle elezioni americane? Potrà sembrare strano, ma non sono le stesse cose. Ne abbiamo parlato a @skytg24.bsky.social business, con Mariangela Pira 🎧⬇️ tg24.sky.it/economia/sky...

Chronicle of death foretold. After months of pain, Northvolt filed for bankruptcy and there go 900€ million in EU state aid. Nothvolt was the first case of application of 'matching aid' - an IRA counter measure, introduced to avoid investment being diverted from Europe. www.ft.com/content/22df...

Financing is key: how to finance and deliver EU defence as genuine EU public good? Already on Feb. 27, 2022 (!) @tagliapietra.bsky.social , @smerler.bsky.social , Ana Palacio and myself had proposed a mini-RRF to finance, among other stuff, EU defence. 6/12 www.project-syndicate.org/commentary/e...

Has the Trump rally plateaued?

It’s getting lonely, in the world of #sustainablefinance taxonomies. After several delays, the UK seems to now have second thoughts. While 41 taxonomies have been launched or are being developed globally, so far the EU Taxonomy is the only mandatory one. www.responsible-investor.com/uk-consults-...