Macquarie warns on populist US economic policies fuelling inflation, shallow Fed rate cuts

Macquarie analysts cited in a Dow Jones / Market Watch (gated) piece:

  • US “neoliberal vision” of economic policy management may be fading out
  • Taken over by a “populist economic vision”

Macquarie analysts refer to the new populism as “popunomics” and say its “inflationary by design”:

  • while US inflation may continue to stay low in the next few months and allow the Fed to start easing in September, once ‘popunomics’ is invoked, inflation will be a feature of the system
  • US yields may again rise
  • the Fed’s easing cycle may be shallower than presumed

If this continues to weigh on stockmarkt is won’t be popular at all.

I guess the epic rise in US government debt is just a hidden form of populist economics. That looks set to continue regardless of which party wins in November.

This article was written by Eamonn Sheridan at www.forexlive.com. Source