Latest news with #GeoffDennis
Economic Times
4 days ago
- Business
- Economic Times
Geoff Dennis sees two Fed rate cuts as labour market softens
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads "The markets have got used to these deadlines being pushed. But were these tariff levels to be actually imposed and presumably a lot more countries may well find that they join this list because this list now is, it came out in two slugs if you like," says Geoff Dennis , Independent EM of all, we do not know if he would not back away again like he has done before. The tariffs are apparently going to be launched on August the 1st. So, we will see if he backs away again. But the important thing here is the markets are not paying as much attention to this as they did in other words, when we had the so-called Liberation Day in early April, markets in the US especially completely fell apart. Everything went down. The dollar went down, bonds went down, and equities went down. Whereas everybody is a bit calmer now. And the reason people are calmer is first of all they do not know if he is going to carry through his threats to impose these tariffs and also very importantly there is a little bit more reassurance that the inflation impact of these tariffs within the US may be less than people had previously thought. So, we have got to watch it. There is a global trade war going on, but we are not going to see a return to the extremely volatile negative trading in the US and therefore around the world that we saw in the early part of April.I think the latter. The markets have definitely. The markets have got used to these deadlines being pushed. But were these tariff levels to be actually imposed and presumably a lot more countries may well find that they join this list because this list now is, it came out in two slugs if you these tariffs were imposed, this would eventually cause the markets to be quite volatile for a period of time. They are bad news. They are not good for the global economy. They are not good for the are not good for all the countries that are being tariffed. It is just we just do not know whether these tariffs are actually be imposed. But this is still absurdly absurd policy, I should it is also worth pointing out that the number of deals that Trump has made on trade, I suppose you could say three, the UK, China, and Vietnam. And perhaps India is not far away and that is why India may get some protection unless I have missed it.I do not think India has been given another tariff announcement if you like in the last week or so. But if he carries these levels through, yes, we will go back to volatile markets just maybe not quite as volatile as they were in April because at the end of the day what investors want to know is what will be the impact on the US economy , what will be the impact on US inflation , what will be the impact on the US trade deficit, and of course, through all of those, what will be the impact on the US dollar?I think we are going to get two rate cuts, I am in that camp. I do not think we are going to get a rate cut in July. We needed a softer employment report at the beginning of the month to get the rate cut in July, but we will get one in September and one in the fourth quarter because what is happening underneath everything that is going on is the labour market is beginning to soften. It is not softening dramatically, but it is also becoming a little bit, what should we say, fixed in place. There are not many people moving. There are not many people being taking new jobs. There are not many people being laid off. There is just not a lot of new job opportunities. Sentiment towards the labour market is also deteriorated and that is going to be powerful support for a couple of rate also, as I have said earlier, if in the end the inflation impact, which frankly we have not really seen yet from the tariffs and just the general inflation story, is perhaps a little bit less fearsome than we all feared it would be a few months ago and to be fair, the Fed feared it would be a few months ago, I think that will open the way for interest rates to be Powell will not cut rates because Trump tells him to. Chair Powell will cut rates because they think the economy is under a little bit of pressure against a background where the inflation story is still reasonably under control.
Time of India
4 days ago
- Business
- Time of India
Geoff Dennis sees two Fed rate cuts as labour market softens
"The markets have got used to these deadlines being pushed. But were these tariff levels to be actually imposed and presumably a lot more countries may well find that they join this list because this list now is, it came out in two slugs if you like," says Geoff Dennis , Independent EM Commentator. How do you read the entire tariff saga? Yesterday evening yet again President Donald Trump has sent letters to several countries, 50% tariff on Brazil, 25% to Sri Lanka and several other countries. How do you read this move and are you bracing up for a lot of volatility over the next one month? Geoff Dennis: First of all, we do not know if he would not back away again like he has done before. The tariffs are apparently going to be launched on August the 1st. So, we will see if he backs away again. But the important thing here is the markets are not paying as much attention to this as they did before. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Cara Membantu Orang Terkasih Menghadapi Limfoma Limfoma Pelajari Undo So, in other words, when we had the so-called Liberation Day in early April, markets in the US especially completely fell apart. Everything went down. The dollar went down, bonds went down, and equities went down. Whereas everybody is a bit calmer now. And the reason people are calmer is first of all they do not know if he is going to carry through his threats to impose these tariffs and also very importantly there is a little bit more reassurance that the inflation impact of these tariffs within the US may be less than people had previously thought. So, we have got to watch it. There is a global trade war going on, but we are not going to see a return to the extremely volatile negative trading in the US and therefore around the world that we saw in the early part of April. Just like you were mentioning the last time we spoke you said that the tariff deadline could be extended. Now, it has not exactly been extended but the implementation deadline we have and that is new, so that is exactly what happened. But now talking about the markets, do you feel that in any way they are under-pricing the impact that these tariffs could have going forward or do you believe that the market has sort of gotten used to these deadlines getting pushed? Geoff Dennis: I think the latter. The markets have definitely. The markets have got used to these deadlines being pushed. But were these tariff levels to be actually imposed and presumably a lot more countries may well find that they join this list because this list now is, it came out in two slugs if you like. If these tariffs were imposed, this would eventually cause the markets to be quite volatile for a period of time. They are bad news. They are not good for the global economy. They are not good for the US. Live Events They are not good for all the countries that are being tariffed. It is just we just do not know whether these tariffs are actually be imposed. But this is still absurdly absurd policy, I should say. And it is also worth pointing out that the number of deals that Trump has made on trade, I suppose you could say three, the UK, China, and Vietnam. And perhaps India is not far away and that is why India may get some protection unless I have missed it. I do not think India has been given another tariff announcement if you like in the last week or so. But if he carries these levels through, yes, we will go back to volatile markets just maybe not quite as volatile as they were in April because at the end of the day what investors want to know is what will be the impact on the US economy , what will be the impact on US inflation , what will be the impact on the US trade deficit, and of course, through all of those, what will be the impact on the US dollar? Also, wanted your thoughts on the recent FOMC minutes that came out yesterday. There is a lot of divergence in what officials think the outlook could be for interest rate for the rest of the year. Although 10 on 17 analysts believe that perhaps we could see at least two rate cuts for the rest of this calendar year. How do you view this and what in your opinion will the interest rate trajectory be for this calendar year and for FY26? Geoff Dennis: I think we are going to get two rate cuts, I am in that camp. I do not think we are going to get a rate cut in July. We needed a softer employment report at the beginning of the month to get the rate cut in July, but we will get one in September and one in the fourth quarter because what is happening underneath everything that is going on is the labour market is beginning to soften. It is not softening dramatically, but it is also becoming a little bit, what should we say, fixed in place. There are not many people moving. There are not many people being taking new jobs. There are not many people being laid off. There is just not a lot of new job opportunities. Sentiment towards the labour market is also deteriorated and that is going to be powerful support for a couple of rate cuts. And also, as I have said earlier, if in the end the inflation impact, which frankly we have not really seen yet from the tariffs and just the general inflation story, is perhaps a little bit less fearsome than we all feared it would be a few months ago and to be fair, the Fed feared it would be a few months ago, I think that will open the way for interest rates to be cut. Chair Powell will not cut rates because Trump tells him to. Chair Powell will cut rates because they think the economy is under a little bit of pressure against a background where the inflation story is still reasonably under control.
Time of India
6 days ago
- Business
- Time of India
Trade tensions, not BRICS, are the bigger threat to global stability: Geoff Dennis
"The Chinese are desperate for the RMB to play a bigger role. But frankly, I do not see what the BRICS are doing or what they are trying to do represents a currency related threat to the US whatsoever," says Geoff Dennis , Independent EM Commentator. When we speak about the idea of de-dollarisation and we have seen countries like India for instance, we have publicly stated that we are not going to move away from the dollar and de-dollarisation is not a policy that India essentially is looking at. But is there an immediate threat to the United States or to the G7 group of nations from BRICS because Donald Trump is making these comments over and over again. So, do you anticipate an immediate threat A) to the dollar and, of course, to US' hegemony? Geoff Dennis: I do not believe so. This is an issue which has allegedly impacted markets for the best part of 50 years. I am an old guy, I have been around a long time and we were talking about potentially the Deutsche Mark replacing the US dollar as a key reserve currency or the key reserve currency in the late 70s and it has just never happened. Now, right now there is some evidence, of course, that central banks are diversifying out of the dollar. The Chinese are desperate for the RMB to play a bigger role. But frankly, I do not see what the BRICS are doing or what they are trying to do represents a currency related threat to the US whatsoever. I just do not get it frankly. And so, there is some de-dollarisation going on for sure, but I am not sure it is major and I am not sure it is involving the BRICS. In fact, frankly, my own interpretation of all of this is that anything that anybody does overseas, especially if countries get together is almost automatically defined by Trump is anti-America and there is nothing about what the BRICS are doing that is really seriously anti-America and this all boils down at the end of the day to the fact that I just think de-dollarisation is not something that is going to go far in the world even if the dollar's really truly dominant position has pulled back a little bit over the last few years. Given the fact that the reform Bretton Woods and reduce dollar reliance in fact is not new, but is BRICS gaining structural momentum this time in your opinion? Geoff Dennis: It is gaining structural momentum in the sense that you have got a number of other large countries as everybody knows joining BRICS that over and above the original BRICS which was defined by my old friend Jim O'Neill in 2001 which was, of course, just Brazil, Russia, India, China. There are some very important countries that have joined. But still I am not sure exactly what a BRICS summit achieves. Yes, they say all the right things about we support free trade. We condemn tariffs whatever it might be or non-tariff barriers, but as to how much power this group actually can demonstrate currently in the world economy especially against a US president who frankly is a bully to everybody who seems to threaten in some vague way the US dominant position of the world economy. Live Events So, I think it does not sort of matter to me within reason what the BRICS does at this point, whether it gets bigger, whether it gets smaller, whether a lot of presidents and heads of state come to the conferences or not. At the end of the day I do not think it has a lot of power except to say all the right things about trade policy and meanwhile President Trump is rampaging around the global economy like a bull in a China shop and the BRICS will become part of that unfortunately and yet, I do not know how the BRICS particularly fights back and I certainly do not see it as I said earlier being something that is going to turn into a brics-led currency, whatever reserve currency that is going to replace the dollar. The problem here is Trump's tariff policy and it is as simple as that frankly. ETMarkets WhatsApp channel )
Economic Times
6 days ago
- Business
- Economic Times
Trade tensions, not BRICS, are the bigger threat to global stability: Geoff Dennis
The problem here is Trump's tariff policy and it is as simple as that frankly. Synopsis Geoff Dennis, an Independent EM Commentator, dismisses the notion of BRICS posing a currency threat to the US, despite China's desire for a stronger RMB. While some de-dollarization exists, Dennis believes Trump's perception of any overseas collaboration as anti-American is a key factor. "The Chinese are desperate for the RMB to play a bigger role. But frankly, I do not see what the BRICS are doing or what they are trying to do represents a currency related threat to the US whatsoever," says Geoff Dennis, Independent EM Commentator. ADVERTISEMENT When we speak about the idea of de-dollarisation and we have seen countries like India for instance, we have publicly stated that we are not going to move away from the dollar and de-dollarisation is not a policy that India essentially is looking at. But is there an immediate threat to the United States or to the G7 group of nations from BRICS because Donald Trump is making these comments over and over again. So, do you anticipate an immediate threat A) to the dollar and, of course, to US' hegemony? Geoff Dennis: I do not believe so. This is an issue which has allegedly impacted markets for the best part of 50 years. I am an old guy, I have been around a long time and we were talking about potentially the Deutsche Mark replacing the US dollar as a key reserve currency or the key reserve currency in the late 70s and it has just never happened. Now, right now there is some evidence, of course, that central banks are diversifying out of the dollar. The Chinese are desperate for the RMB to play a bigger role. But frankly, I do not see what the BRICS are doing or what they are trying to do represents a currency related threat to the US whatsoever. I just do not get it frankly. And so, there is some de-dollarisation going on for sure, but I am not sure it is major and I am not sure it is involving the BRICS. In fact, frankly, my own interpretation of all of this is that anything that anybody does overseas, especially if countries get together is almost automatically defined by Trump is anti-America and there is nothing about what the BRICS are doing that is really seriously anti-America and this all boils down at the end of the day to the fact that I just think de-dollarisation is not something that is going to go far in the world even if the dollar's really truly dominant position has pulled back a little bit over the last few years. Given the fact that the reform Bretton Woods and reduce dollar reliance in fact is not new, but is BRICS gaining structural momentum this time in your opinion? Geoff Dennis: It is gaining structural momentum in the sense that you have got a number of other large countries as everybody knows joining BRICS that over and above the original BRICS which was defined by my old friend Jim O'Neill in 2001 which was, of course, just Brazil, Russia, India, China. There are some very important countries that have joined. But still I am not sure exactly what a BRICS summit achieves. Yes, they say all the right things about we support free trade. We condemn tariffs whatever it might be or non-tariff barriers, but as to how much power this group actually can demonstrate currently in the world economy especially against a US president who frankly is a bully to everybody who seems to threaten in some vague way the US dominant position of the world economy. So, I think it does not sort of matter to me within reason what the BRICS does at this point, whether it gets bigger, whether it gets smaller, whether a lot of presidents and heads of state come to the conferences or not. ADVERTISEMENT At the end of the day I do not think it has a lot of power except to say all the right things about trade policy and meanwhile President Trump is rampaging around the global economy like a bull in a China shop and the BRICS will become part of that unfortunately and yet, I do not know how the BRICS particularly fights back and I certainly do not see it as I said earlier being something that is going to turn into a brics-led currency, whatever reserve currency that is going to replace the dollar. The problem here is Trump's tariff policy and it is as simple as that frankly. 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Economic Times
19-05-2025
- Business
- Economic Times
Global risks loom, but India stands tall amidst Asia's volatile recovery: Geoff Dennis
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel "India, of course, we hope they get a trade deal with the US, whatever that means, but India is less vulnerable to pressure on the tariff front than are some of these other markets. And I agree with Rajat in terms of the domestic drivers to the economy looks pretty good," says Geoff Dennis , Independent EM Commentator.I agree with almost everything actually Rajat said. In fact, the biggest danger for the Indian market may well not be anything that is going on in India, but whether we get a global pullback again; because frankly, the rally in global markets since we started to get what President Trump likes to call as trade deals which are not really trade deals, they are actually just the framework of trade deals, this rally may have gone a little far in the short term but in terms of relative performance India looks very-very robust is worth pointing out that although India has done well in both local and dollar terms so far in May, the three other big markets in Asia -- Korea, Taiwan, and China have rebounded much more, perhaps they got more oversold, who knows?But and all of them I think have challenges. China with a weak economy and the property sector being still very-very weak indeed. Korea is going to be a big focus of the US in terms of tariff pressure going forward because as they have been already to a certain extent and Taiwan, of course, is entirely driven, almost entirely driven anyway by technology and tariffs it is fair to of course, we hope they get a trade deal with the US, whatever that means, but India is less vulnerable to pressure on the tariff front than are some of these other markets. And I agree with Rajat in terms of the domestic drivers to the economy looks pretty will be an interest rate cut given that very low inflation read the other day. And so, this is all sustainable with, as I say, the biggest risk being do we get a global pullback at some point because global markets especially the US are getting a little bit carried away here in the short-term because there are still very high tariffs in the US on a lot of overseas countries, about nearly every overseas country and, of course, the US economy in my opinion is slowing down and we still have a recession for me the global risk to India is still there. The outperformance of the Indian market versus the rest of em looks to me very correct. It is worth. There are two issues here. Number one, the tariffs are still high and even with this 'deal' the tariffs between China and the United States or the comparative tariffs remain very high and are going to be very disruptive to are going to cause some inflation in the US. Maybe you are not going to get complete breakdown of trade that was implied, of course, by the tariffs which were in double we also do not know, as you have rightly said there, what will happen when this 90-day period is up. So, I do not think you can tuck this away and say it is all sorted, everything is fine because the tariff levels are still very high and are constrictive for growth and will not in my opinion solve the US trade deficit anyway, which is a whole separate the second point I want to make is that forgetting the international scene, the Chinese economy remains very weak. The Chinese government continues to promise dramatic measures to boost consumer spending. But at the end of the day, consumer spending is very economy is being held down, as I said earlier, by the adjustment of the property sector. And if China has to rely less on exports, especially exports to the US and possibly who knows exports to countries like Vietnam and Bangladesh and Sri Lanka for re-export then onto the US because the US government is on to this thing of China basically trying to avoid tariffs by routing through third exports going to remain on the weak side, the big challenge in China is a very-very soft economy and the GDP numbers for China are probably too high for this year. And all of that brings me back to the idea that India is going to be a better place to be as far as equities are concerned in dollar goes down from here and obviously it fell very sharply after so-called Liberation Day and it has stabilised and rallied a little bit since of course, the Indian rupee which you have got up on the screen now has rebounded very nicely by about 2.5-3% since its lows. The weaker dollar has always been for me one of the best triggers if not the best trigger for emerging market what is going on here is the effect of all of these tariffs and all of this uncertainty on the US economy is going to produce very-very weak growth for a period of time unless all the tariffs go away which I just think is not going to though as Rajat says they may settle down for a period of time, but they are not going to all go away. So, I am very concerned about the US economy in the next, let us say, three to four quarters.I am also very concerned about this huge tax deal, beautiful tax deal, whatever they call it, the Congress is working on which is going to blow the budget deficit out further and push the debt level up further as well and all of this is negative although we have stabilised here in recently, the dollar is going to weaken and that is going to push money across to emerging markets generally that has been the historical record and India will be a beneficiary of this and arguably given where tariffs are settling with US and China, it is going to be a bigger beneficiary logically than a country like China or indeed a lot of other countries in emerging and this is one of the reasons why that Bank of America survey that The Economic Times highlighted this morning has India as the biggest overweight amongst investors at the moment. So, I see the dollar falling, will eventually get to 120 against the euro. The European markets do well. Emerging markets do well. India is a big beneficiary of that. And as Rajat also said it is a closed economy, relatively closed economy, not as vulnerable to softer exports as a number of other big markets in Asia the dollar has been unpredictable this year for sure. Very unpredictable. It was supposed to go up with tariffs and it did not do so and that is because what people were doing was selling the United States. And I am not sure that is necessarily over yet depending on obviously how the economy plays out and depending on whether we get another massive jump in the fiscal deficit which is already high on the back, of course, of this tax bill that is getting pretty close in Congress itself.
