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Gianluca Benigno @gianlucabenigno.bsky.social · 26d

Hi, apologies for the delayed reply. Since June, perceptions of the labor market have shifted, and it now seems likely that we’ll see at least two rate cuts by the end of 2025, possibly three. The next SEP is out next week, so we’ll have a clearer view of the new median then.

Gianluca Benigno @gianlucabenigno.bsky.social · Jun 18

Committee Dynamics:

Potential split: There may be a growing divide between the voting members (12 FOMC) and the full committee (19 participants) about the pace and direction of policy.

Future decisions, especially from September on, are likely to hinge on the inflation outlook.

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Gianluca Benigno @gianlucabenigno.bsky.social · Jun 18

Stagflation risks noted:

End of 2025-GDP growth (2025 median) drops from 1.7% to 1.4% (central tendency narrows from 1.5–1.9% to 1.2–1.5%)

End of 2025-PCE inflation (2025 median) rises from 2.7% to 3.0% (central tendency shifts from 2.6–2.9% to 2.9–3.4%)

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Gianluca Benigno @gianlucabenigno.bsky.social · Jun 18

Quick Fed Update: 2025 rate cuts: The median projection still sees 2 rate cuts by end-2025.
Rising support for “no cuts”: In March 2025, 4 FOMC participants saw no cuts in 2025. In June, that number has increased to 7, showing increased caution within the committee on easing policy further.

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Gianluca Benigno @gianlucabenigno.bsky.social · May 23

open.substack.com/pub/gianluca...

Japan April-25 CPI Inflation Report

Sticky core and goods inflation keep pressure on the BoJ’s cautious stance.

open.substack.com

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Gianluca Benigno @gianlucabenigno.bsky.social · May 23

Japan Inflation (Apr): CPI steady at 3.6% YoY; core CPI up to 3.5%. Food eased, but rice +98.4% YoY. Goods—not services—drive inflation. BoJ likely to stay cautious amid external risks.

#Japan #CPI #BoJ #inflation #economy #Yen

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Gianluca Benigno @gianlucabenigno.bsky.social · May 21

open.substack.com/pub/gianluca...

UK April-25 CPI Inflation Report

Headline CPI rose as regulated price increases took effect. More notably, there was a surprise uptick in services inflation, which climbed to 5.4%.

open.substack.com

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Gianluca Benigno @gianlucabenigno.bsky.social · May 21

UK data: CPI rose to 3.5% YoY (vs. 3.3% expected), led by services inflation at 5.4% YoY, up from 4.7%. With wage growth sticky at 5.4% YoY, the current release might lead to a further cautious approach by the #BoE.
#UKinflation #CPI #wages #BoE #interestrates #monetarypolicy

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Gianluca Benigno @gianlucabenigno.bsky.social · May 20

Decline in interest rates would mitigate the cash-flow channel (associated with higher mortgage payments) and support aggregate demand, but overall, it is hard to see how all this would lead to inflation in a low-growth context with lack of fiscal support

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Gianluca Benigno @gianlucabenigno.bsky.social · May 20

Thanks for your comment, I agree that there are structural factors in explaining pressures in the rental market, but what is striking about the UK and also Canada is how rent inflation started rising as interest rates increased and now has recently declined in Canada as they cut interest rates more.

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Gianluca Benigno @gianlucabenigno.bsky.social · May 20

From a monetary policy perspective, these factors suggest that more decisive easing by the Bank of England could be appropriate, with relatively limited side effects in the current context. #Inflation #Interestrates #MonetaryPolicy 3/3. open.substack.com/pub/gianluca...

The Flip Side of UK Monetary Policy

This note draws from remarks I delivered as part of the monetary policy outlook panel at the Bank of England Watchers’ Conference.

open.substack.com

Gianluca Benigno @gianlucabenigno.bsky.social · May 20

I made 3 key points: a)The role of rent inflation in accounting for UK inflation and its persistence b)The rapid and sizeable increase in the policy rate as a driver of UK inflation through higher rent c)The role of wage growth as demand support rather than just an input cost 2/3

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Gianluca Benigno @gianlucabenigno.bsky.social · May 20

I presented "The Flip Side of UK Monetary Policy" last week at the BoE's Watchers Conference. The main message is that the transmission mechanism of monetary policy is not mechanical, but depends on state-contingent and institutional country-specific factors. #BankofEngland 1/3

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Gianluca Benigno @gianlucabenigno.bsky.social · May 13

No signs of tariffs-induced price increases yet for the U.S. economy.

open.substack.com/pub/gianluca...

US April-25 CPI Inflation Report

Disinflation continues, as tariff-driven inflation fears have yet to materialize. The current release suggests no change in the "wait and see" monetary policy approach.

open.substack.com

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Reposted by Gianluca Benigno

Nathan Converse @nathanecon.bsky.social · Apr 19

Finally, in my own paper with @gianlucabenigno.bsky.social and @lucafornaro.bsky.social, we show that the Financial Resource Curse is not merely a theoretical possibility by presenting careful empirical evidence that it is a general phenomenon www.sciencedirect.com/science/arti... 4/n

Large capital inflows, sectoral allocation, and economic performance

This paper describes the stylized facts characterizing periods of exceptionally large capital inflows in a sample of 70 middle- and high-income countr…

www.sciencedirect.com

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Reposted by Gianluca Benigno

Nathan Converse @nathanecon.bsky.social · Apr 19

In an AER paper w Martin Wolf (of U.St.Gallen) @gianlucabenigno.bsky.social and @lucafornaro.bsky.social show that the Financial Resource Curse has even larger negative implications when flows go to the world technological leader, I.e. the US (ungated here: www.newyorkfed.org/research/sta...) 3/n

The Global Financial Resource Curse - FEDERAL RESERVE BANK of NEW YORK

www.newyorkfed.org

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Reposted by Gianluca Benigno

Nathan Converse @nathanecon.bsky.social · Apr 19

I like that Brunnermeier and Merkel at least nod (without citation for some reason) at @gianlucabenigno.bsky.social and @lucafornaro.bsky.social ‘s work on the Financial Resource Curse (e.g crei.cat/wp-content/u...) 3/n

crei.cat

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Reposted by Gianluca Benigno

Menzie Chinn @mchinn.bsky.social · Apr 9

When tariffs become a financial shock inducing feedback loop in asset prices @gianlucabenigno.bsky.social #econsky
econbrowser.com/archives/202...

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Gianluca Benigno @gianlucabenigno.bsky.social · Apr 7

My teaching notes on the new U.S. Trade regime. What are tariffs? Who pays for it? Do they increase prices? what policy actions have been adopted, their implementation and possible legal challenges.
open.substack.com/pub/gianluca...

A Quick Guide to the New U.S. Trade Regime

This is a major structural shift to the global economy, here I review the basics.

open.substack.com

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Gianluca Benigno @gianlucabenigno.bsky.social · Feb 13

January CPI inflation release surprised on the upside. Core inflation seems to be stuck above 3% showing little progress. As trade tensions increase, goods prices will likely add to inflationary pressures rather than contribute to disinflation as in 2024.
gianlucabenigno.substack.com/p/us-january...

US January-25 CPI Inflation report

An unexpected rise in inflation will likely dampen expectations for rate cuts, reinforcing the Fed's cautious stance and increasing the likelihood of a prolonged higher-for-longer rate environment.

gianlucabenigno.substack.com

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Gianluca Benigno @gianlucabenigno.bsky.social · Jan 29

Interest Rates Politics: can Trump Pressure the Fed?
open.substack.com/pub/gianluca...

Interest Rates Politics: can Trump Pressure the Fed?

It is still inflation that matters

open.substack.com

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Gianluca Benigno @gianlucabenigno.bsky.social · Dec 20

This is the link of @martinsandbu.bsky.social on.ft.com/4gqJKmz

A Copernican revolution in EU economic thinking?

‘Draghi plus’ would make Europe take domestic demand seriously — and not before time

on.ft.com

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Gianluca Benigno @gianlucabenigno.bsky.social · Dec 20

Nice article by @martinsandbu.bsky.social on Draghi's proposal. "Demand creates its own supply" this is what happens in the Keynesian growth framework (libertystreeteconomics.newyorkfed.org/2019/04/the-...)

The Keynesian Growth Approach to Macroeconomic Policy and Productivity - Liberty Street Economics

Productivity is one of the key determinants of potential output—that is, the trend level of production consistent with stable inflation. A productivity growth slowdown has occurred in several advanced...

libertystreeteconomics.newyorkfed.org

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Gianluca Benigno @gianlucabenigno.bsky.social · Dec 10

How can Central Banks manage the post-pandemic world with increased macro variability, geopolitical tensions, and shifting interest rate dynamics? Building on the BoE, I explore how scenario analysis could emerge as a new communication device for CBs. gianlucabenigno.substack.com/p/scenario-a...

Scenario Analysis as Communication Device for Central Banking

Reshaping Communication: The Bernanke Review will affect Central Banks’ communication beyond the Bank of England.

gianlucabenigno.substack.com

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Reposted by Gianluca Benigno

Lukas Mergele @lukasmergele.bsky.social · Nov 27

@andreasbeerli.bsky.social @gianlucabenigno.bsky.social @kenzabenhima.bsky.social @fuster.bsky.social @eyquem2.bsky.social @dominic-rohner.bsky.social @marcbruetsch.bsky.social @karstenjunius.bsky.social

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