Eric Bushell's blog
June 19 marked the 10-year anniversary of the start of the financial crisis in the U.S. One week later on June 27, as Italy finalized the recapitalization of Banca Monte dei Paschi di Siena SpA, global bond yields began to rise in a synchronized fashion by 25–50 basis points (see chart). Despite inflation levels that remained below stated targets, central banks committed themselves to pressing ahead with an exit from the emergency monetary policies of the crisis period. A milestone in the crisis may have been reached. We had been waiting for European bank recapitalizations since 2009!
In the summer of 2016, Signature argued that markets were approaching a regime change. A multi-year deflationary impulse was fading and a reflationary turn was at hand. Commodity prices had stabilized and growth dynamics were improving along with financial conditions in the banking sector and credit markets. Populist political risks, exemplified by Brexit in late June, drove politicians worldwide to abandon austerity in favour of fiscal spending. Monetary policy alone was out of bullets but coupled with fiscal action wo