Policy Tipping Points

Michala Marcussen, Group Chief Economist, explains the latest economic trends.

Michala Marcussen on Bloomberg TV

U.S. economy heading towards a more substantial slowdown

Michala Marcussen, Group Chief Economist at Societe Generale, talks about European, U.S., China's economies and policies. She speaks on "Bloomberg Daybreak: Asia."

Watch the interview on Bloomberg TV

Manus Cranny and Yousef Gamal El-Din and Michala Marcussen

How would a 'Hard Brexit' affect the U.K. economy?

Michala Marcussen, group chief economist at Societe Generale, talks about the Brexit negotiations and the implications for the British economy. She speaks with Manus Cranny and Yousef Gamal El-Din on "Bloomberg Daybreak: Middle East."

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Bitcoins, cash and tulips

Bitcoins generated much excitement in 2017, starting off the year valued at just over $1 000 per bitcoin and closing the year at around $10 000, having peaked at close to $19 000 in mid-December 2017. While the extreme volatility of Bitcoin generates both spectacular gains and devastating losses, it significantly reduces the ability of the crypto-currency to serve as a means of payment; the purpose for which it was originally designed. Michala Marcussen, Group Chief Economist, explains the latest trends around the bitcoin.

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Businessman pushing a car with empty fuel tank

The search for missing inflation

For fifty years, the obsession for combating inflation has dominated OECD economies. Today, inflation has virtually disappeared; central banks are struggling to increase it towards their 2% target. There are multiple causes and they are often linked: globalisation, technological innovations, weakening influence of trade unions, lacklustre global demand, weak inflation expectations… The spectre of “Japanisation” now hovers over the developed economies.


China’s influence is tilting to demand

In just two decades, China has moved from the world’s 6th largest economy to the 2nd, more than quadrupling its share of global GDP and taking the title, the World’s factory. While China remains a major source of supply to the global economy, both for intermediate and final goods, the more striking feature today is just how important China has become as a source of global demand; even surpassing the US for several major Asian economies. In the wake of the 2008/09 crisis, China, moreover, became the World’s investor of last resort. As such, it is no surprise that news from China impacts global financial markets. China’s large financial system nonetheless still has a low degree of international integration, albeit that funding from China has become more important, not least for a number of emerging economies.

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Interest rates curve

The challenges of a low interest rate environment

Although a boon for borrowers who find themselves more solvent, the current low interest rate environment is posing real challenges for investors as they see plummeting returns on their savings. In addition, persistent low/negative rates could aggravate a certain number of risks to financial stability, especially by encouraging debt gearing, contributing to a potentially unsustainable rise in the price of assets and prompting certain investors to overexpose themselves in their search for yield. Although nowadays banks, on the whole, are more resilient than prior to the 2008 financial crash, new vulnerabilities are appearing as investors turn to assets offering higher returns but greater risks or less liquidity, issued by non-bank financial players.
The new financial system’s ability to withstand macrofinancial shocks has yet to be proven.


Dollar coin

Dollar strength may be challenged by fiscal policy

President Trump is pressuring the Federal Reserve to ease aggressively and has complained that China and Europe are taking unfair currency advantage. And, in early August, Washington designated China a currency manipulator. The ever lower and flatter American yield curve, however, signals concern that monetary easing will struggle to revive the economy. Further evidence hereof resides in the coinciding strength of the US dollar and Gold.


Man on a japanese trading floor

What if the Japan is the good scenario?

The impressive expansion, that saw Japan become one of world’s richest nations, came to an abrupt end almost three decades ago with bursting of the bubble. Subsequent domestic policy errors combined with negative external shocks, and not least the 1997 Asia Crisis, sent the Japanese economy into the icy grip of deflation. Exiting this state was not made any easier by a rapidly ageing population and the 2007/08 Great Financial Crisis.


Magnifier over a map of France

Leveraging the French paradoxes

Two years into his Presidency, Emmanuel Macron has delivered a flurry of reforms that aim to leverage the strength in the paradoxes of the French economy: high productivity yet improvable education, enviable demographics yet low labour utilisation, relatively low poverty rates yet surprisingly low social mobility…