Tomas Hirst on the State of ECB Policy and the Eurozone Economy
Macro Musings with David Beckworth
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Are We Growing Faster Than Trend or Not?
In the Eurozone, demand is barely back to its trend. It's being asked to step up at a moment where Europe is facing very extreme pressures on household budgets because of the energy crisis. And my contention is that the distribution of those savings are such now that it's very, very likely they sit with very high income households. As rates rise in Europe, it's even more likely that the MPC of people with those savings is going to be extremely low. They may never see a chunk of those savings coming back into the system. If we're banking on those excess saving systems here, I think that all wagers are wrong.
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