- By mid-2010 the recovery of the US economy has lost momentum. Growth should remain muted in the second half of the year. The US economy is thus cruising at close to its stall speed, at which the risk of recession rises. Although there are also upside risks in the short term, we expect growth to accelerate only over the course of 2011.
- In this environment, slack in the economy remains substantial, so that disinflationary tendencies will dominate for now. As a result, the Fed is expected to stay on the sidelines until the end of the coming year before beginning to withdraw policy accommodation, despite the current extremely loose stance of monetary policy.
» PDF, 129 KBWas there a euro crisis at all? While a break-up of the currency union was still being talked about not so long ago, the picture for the euro zone has changed completely. A new economic miracle is being hailed in Germany...
» PDF, 580 KB
The German economy grew in the second quarter by 2.2 % over the previous quarter, or by 9 % using the American, annualized notation. Exports reached record levels, and German businesses are suffering from a shortage of skilled workers. If one combines these two components, this sounds like a boom and rising stock prices. In this environment, how can one explain why stock markets have pulled back noticeably over the last few days?
» PDF, 205 KBDr. Gertrud R. Traud
Chief Economist/Head of ResearchAdobe Acrobat Reader is required in order to view or print the documents.