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Analysis

Fed and the election

THE OMFIF MONTHLY BULLETIN – Press release

5 May 2016, London

May 2016 Bulletin Cover 294

The tightly fought US presidential race, building momentum just as the UK limbers up for the 23 June EU referendum, may soon become a factor on financial markets. November’s Republicans v. Democrats battle and the British plebiscite on Europe share common characteristics. Both feature candidates seeking to allay voters’ fears over the negative effects of foreign economic intrusion, inequality and immigration in a world that often appears too connected for comfort. Robert Kaplan, president of the Federal Reserve Bank of Dallas, touched on some of these issues in an OMFIF lecture on 29 April, which we reproduce in an abridged form.

The May Bulletin analyses the key issues confronting the US electorate in November’s poll. Marsha Vande Berg focuses on wage stagnation and the nation’s desire to resuscitate the American dream. Efraim Chalamish examines Chinese investment in the US, a principal source of fear about outside interference. Darrell Delamaide investigates how the Federal Reserve is signalling allayed concerns about global economic and financial hazards, possibly foreshadowing a rate rise later this summer. Ben Robinson looks at the rising dollar and the effect on emerging market currencies.

OMFIF’s monthly review records the nomination of three economic experts from different parts of the world – Kingsley Moghalu, Niels Thygesen and Robert Johnson – as senior advisers, joining a now eight-strong group. We portray OMFIF developments including an asset management seminar in Singapore, sessions at the Washington spring meetings of the International Monetary Fund and World Bank, London discussions on central bank investing, and the signing of an accord on the internationalisation of the renminbi with China Construction Bank.

Richard Koo of Nomura Research Institute outlines radical ideas on improving euro member countries’ capacity for self-financing. John Mourmouras of the Bank of Greece weighs the pros and cons of ultra-low interest rates. Michael Stürmer analyses the geopolitics of oil.

Other highlights of the May 2016 edition:

  • Tarisa Watanagase, former governor of the Bank of Thailand, demonstrates how the Asean economic growth engine is ploughing through global vicissitudes.

  • Jorge Vasconcelos shows how the world is moving towards a lower-carbon energy mix following December’s Paris agreement.

  • David Smith underlines how Brazil is looking to Argentina for solutions to its economic crisis.

  • Brigitte Granville sums up her bleak views on France’s political entrapment in monetary union.

  • George Hoguet reviews a plea for the revival of ‘Hamiltonian’ industrial policy in the US.

The Bulletin is available to OMFIF members, and to non-members on a subscription basis. To subscribe please contact: membership@omfif.org.