Pegasus Capital

Blog With Tag inflation

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A View from the Bridge - February 2017

So, the fingers are on the triggers and we are ready, steady and all set to go with the UK about to trigger Article 50 and the US Fed set to trigger the next interest rate rise. What that could mean for both economies will clearly play itself out over the coming months and years but there are already signs of divergence in the outlook for both.

PegasusCapital - Thu 2nd Mar

A View from the Bridge - May 2016

Could this be the month that everything changes with a big vote in June? Of course it will be a close vote, perhaps too close to call, but it will be the economy that takes centre stage. With oil prices back up to around $50 per barrel creating some inflation, consumer spending up 1% in April on the back of falling unemployment and some wage growth it’s no wonder that many policymakers in the US believe an interest rate rise would be appropriate at the June Fed meeting.

PegasusCapital - Wed 1st Jun

A View from the Bridge - November 2015

Last month it was 65% of economists and this month its 81% of global fund managers that expect a December interest rate rise in the US, with the Fed having given out the strongest signs so far that it will pull the trigger. That said, the Fed funds futures market currently implies that there is a 74% chance of a rate rise, which is a more accurate reflection of probability. With US GDP being revised upwards from 1.5% to 2.1% for Q3, unemployment falling to a 5 year low with a further 270k jobs being created and wage growth rising to 2.5% year on year it would appear that the data supports the rate rise view.

PegasusCapital - Tue 1st Dec

A View from the Bridge - July 2015

Tough love is sometimes needed and at times it can work; just witness Spain and Ireland where after some rough times both economies are growing at more than 3%, the fastest rate since the crises began. However throwing money or should we say creating more debt will not necessarily provide a long term solution. Eurozone debt has now reached a record high at 92.9% of GDP with Greece, Italy, Belgium, Cyprus, Portugal and Ireland all exceeding 100% and France nearly there at 98%. In a low rate environment the political agenda can supercede fiscal reality but the IMF gave us a timely reminder that reality has to kick in eventually when it announced that it could not participate in the Greek bailout because the sums just don't add up.

PegasusCapital - Mon 3rd Aug

A View from the Bridge - April 2015

Guessing when interest rates might rise is as difficult as predicting which political parties will form the next UK government. However, for those of you that have been following our thoughts on this since 2011, you will know that we have consistently pointed out that rates will be #LowerForLonger (Twitter @pegasuscap) due to the effects of QE, the structural deficit and the overall levels of personal and government borrowing.

PegasusCapital - Thu 30th Apr

A View from the Bridge - Sep 2017

UK GDP increased by 0.3% quarter-on-quarter in Q2, matching the second quarter estimate and the consensus however, the y-o-y growth rate was revised down to 1.5%, from 1.7%. In addition, the latest PMI survey showed a modest deceleration in the rates of expansion in UK manufacturing production and new orders. Exports remain a bright spot and are still rising at one of the strongest rates over the past six-and-a-half years however, manufacturing is also increasingly being impacted by rising cost inflationary pressures due to rising commodity prices and higher import costs from the historically weak sterling exchange rate.
Tags: UK GDP, ECB, FOMC

PegasusCapital - Wed 4th Oct