The Ricardian Equivalence
14/06/2025 by Tony Redondo This was proposed by David Ricardo, one of the most influential classical economists, in the 19th century and later formalized by Robert Barro, a US macroeconomist in the 1970s. It suggests that government deficit spending does not stimulate aggregate demand because rational consumers anticipate future tax increases to pay off the […]
The Laffer Curve
07/06/2025 by Tony Redondo The Laffer Curve is an economic concept illustrating the relationship between tax rates and tax revenue. It suggests that at a 0% tax rate, revenue is zero, and at a 100% tax rate, revenue is also zero (as no one would work if all income were taxed). Between these extremes, revenue […]
Sell America Sentiment prevails
31/05/2025 by Tony Redondo The US Dollar continues to dip as the Moodyâs debt downgrade, weak GDP and TACO (Trump Always Chickens Out) continue to fuel a ‘Sell America’ sentiment in the financial markets.Last week, Moodyâs downgraded the US credit rating from âAaaâ to âAa1â due to growing debt concerns. Weak US GDP data with […]
Brexit reset or surrender?
24/05/2025 by Tony Redondo PM Sir Keir Starmer announced details of a UK-EU Brexit âresetâ deal: – What Starmer’s new UK-EU deal means for you The BCC (British Chambers of Commerce) welcomed the new UK-EU reset deal saying that this âsummit marks a new beginningâ which is a turning point for British businesses. The […]
Tariffs
17/05/2025 by Tony Redondo If a year ago, someone would had announced that the best-case scenario would be for average US tariffs to quadruple, from 2.5% to over 10% they would have been considered a âdoomsayerâ. Today, the financial markets cheer the news. We are in the midst of a classic game of maximalist demands […]
Trade Deal Time
10/05/2025 by Tony Redondo There is a saying in London which runs âYou wait for ages for a bus and then two come along togetherâ. So, it can be said with the UK-India and UK-USA trade deals finalized last week, marking significant steps in the UKâs post-Brexit trade strategy amid global economic turbulence. The UK-India […]
Interest Rates in Focus
03/05/2025 by Tony Redondo The BoE (Bank of England) make their next monthly decision on UK interest rates on Thursday. The markets see an 80% chance of a 0.25% cut and a 20% of a bigger 0.5% cut but with inflation expected to spike to 3.7% in the coming months, the BoE finds itself between […]
Itâs election time
26/04/2025 by Tony Redondo Canada goes to the polls on Monday, to elect its next Prime Minister. Will it be Liberal leader and ex-Governor of both the Bank of Canada and the Bank of England, Mark Carney or Conservative leader Pierre Poilievre. YouGov are predicting a tight race with a possible Liberal majority of 21 […]
Is the chaos over?
19/04/2025 by Tony Redondo Is the market chaos of the last few weeks abating or was it only the opening shot of something much bigger. Are we just in a trade war or in a fight for the 21st century. Trump pressed pause on his sweeping âretaliatoryâ tariffs on dozens of countries for 90 days […]
USA â China are getting a divorce
12/04/2025 by Tony Redondo Itâs not pretty. Certainly not amicable but the US and China are getting a divorce with China already vowing to âfight to the endâ. At the time of writing, the latest tariff position is as follows. 145% duty on all goods from China, 25% tariffs targeting aluminium, autos and goods from […]