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Wednesday, March 12

12th Mar - US rate hikes coming, ECB still sits

Previously on MoreLiver’s:

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George Soros Offers His Two Pence on Scotland’s Currency DebateWSJ
Soros Says Europe Faces 25-Year Slump Without OverhaulBB
George Soros said Europe faces 25 years of Japanese-style stagnation unless politicians pursue further integration of the currency bloc and change policies that have discouraged banks from lending.

Economic Outlook - Fragile growthNordea
In the Nordic region Sweden appears to be best positioned for substantial progress over the coming years. Denmark and Finland are both in for a moderate recovery while the Norwegian economy dampens significantly after years of high growth.
ECB’s Hansson: Energy Price Falls Largely Responsible for Low InflationWSJ

ECB’s Coeure: No Deflation in the Euro Zone, but Risk RemainsWSJ

ECB’s Praet: Current issues and challenges for central bank communicationECB

ECB moves closer to decision on minutesFT
ECB is nearing a decision on whether to publish the minutes of its monetary policy meetings, a top official signalled on Wednesday, a move which would bring the central bank into line with peers in the UK, US and Japan.

Paralysed ECB leaves Europe at the mercy of deflation shock from ChinaThe Telegraph
China will seek to pass its deflationary parcel to Europe, the one region that lacks a proper central bank and the governing coherence to protect its own interests

The spectre of eurozone deflation FT
Martin Wolf: The ECB is failing. The aim must be to raise inflation, particularly in surplus countries

Obama Meets Ukraine Leader, Presses Putin to Back Down – BB
Russia Said to Get Ready for Iran-Style Sanctions in Worst Case – BB

Greece and denying responsibilitymainly macro
It is clearly nonsense to argue that the damage done to the economy and health of the Greek people is all down to corruption and inefficiency within Greece and nothing to do with Troika actions. Denial of responsibility is particularly dangerous if it means not admitting your mistakes but instead repeating them.

Italy presents sweeping tax cuts, plans to raise deficit goalReuters
Italian Prime Minister Matteo Renzi on Wednesday presented a sweeping package of tax cuts, saying they could help economic recovery in the euro zone's third largest economy without breaking EU budget deficit limits.

What Stanley Fischer Did at the IMFView / BB
Fischer has been nominated to be the vice chairman of the Federal Reserve Board. But senators should query him during his confirmation hearing about his time as No. 2 at the IMF.

On That Hawkish Wage TalkTim Duy’s Fed Watch
It is reasonable to expect that evidence that slack is dissapating more quickly than expected will trigger a fresh assessment among policy makers regarding the appropriate policy path. Next week is probably too soon; later meetings are more likely.  Given that wages already appear to be on the rise - a key sign of tightening labor markets - that change could happen quickly.  This is not a call for higher rates; it is a warning that higher rates might be coming.

Jobs and UnemploymentEPI
Nowhere CloseThe Long March from Here to Full Employment

A few points on slackThe Economist
Things are mostly moving in the right direction, but across several key variables that improvement has merely pushed the labour market back to where it was in the depths of the last two recessions. The Fed's latest projections show the economy reaching full employment in 2016.

Known unknowns about labour market slackFT
In our opinion, the stronger hawkish argument right now is about financial instability. We don’t actually agree this argument either.

Overshooting and the FedFT
People are confusing two separate questions in the recent debate about wage rises and spare capacity in the US economy: first, the amount of slack left in the labour market, and second, whether the Fed should deliberately try to overshoot its inflation objective of 2 per cent.

What is the Fed's Real Inflation Target?Macro Musings
Even two years out the FOMC is predicting inflation no higher than 2%. Since the FOMC has some influence on inflation this far out, this forecast reflects beliefs about current and expected Fed policy. It suggests that the FOMC is not taking an symmetric approach to its 2% inflation target. Instead, the FOMC is aiming to error on the side below 2%, at least in its forecasts.

Global Business Cycle MonitorDanske Bank
Global indicators weakened somewhat at the beginning of 2014, partly due to bad weather in the US. Europe is the strongest region while indicators in the US and EM have softened.

Soros Taloussanomille: Suomi ja Saksa eroon eurostaTalSa
Suursijoittaja George Soros jakaisi euroalueen kahtia. Eliittieurokerhoon pääsisivät muun muassa Suomi ja Saksa. Soros kertoi näkemyksistään tänään toimittajille Lontoossa.

"Suomalainen talouskeskustelu täysin yksiäänistä"TalSa
Tutkijat Jussi Ahokas ja Lauri Holappa esittelivät tänään Helsingin yliopistolla rahatalouden toimintaa ruotivaa tietokirjaansa. Ilmarisen johtaja Jaakko Kiander ja Valtion taloudellisen tutkimuskeskuksen ylijohtaja Juhana Vartiainen kiittelivät teosta.

Talousnäkymät - Hauraita itujaNordea
Maailmantalouden näkymät ovat säilyneet optimistisina jo jonkin aikaa. Globaali kasvu paranee pikku hiljaa kehittyneiden maiden vedolla. Elpymisestä vastaa ennen kaikkea Yhdysvallat.

"Suomen talous kasvaa, jos sotimaan ei aleta"TalSa
Sota Krimillä tai Venäjälle asetettavat talouspakotteet kääntäisivät Suomen talouskasvun laskuksi, Nordean pääekonomisti Aki Kangasharju sanoo.