From global markets to questions of development, money and economic activity.
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Concern about global growth weakened emerging market portfolio investment at the end of 2018. Jonathan Fortun and Tariq Khan report December inflows of $3.1 billion, comprising $2.9 billion in equities and just $0.2 billion in debt. Their broader net capital flow measure remained negative in November, a separate observation from the December securities figures.
Read the workDigital platforms and potential central bank digital currencies could change how stable retail deposits are as a source of bank funding. Brad Carr and Jonathan Fortun explored scenarios in which innovation affects bank balance sheets unevenly, despite banks having shifted toward more stable funding after the financial crisis. The December 2018 analysis treated these developments as emerging possibilities, with implications for liquidity management and the regulatory treatment of deposits.
Read the workAfter the 2018 emerging market selloff, improving sentiment raised a question: how much exposure had investors actually shed? Jonathan Fortun, Robin Brooks and Tariq Khan combine capital flow data with changes in asset valuations to measure positioning. Their framework distinguishes money moving across borders from changes in the value of existing holdings, which historically accounted for most shifts in positioning.
Read the workFortun and Natalia Bailey discuss lessons from an IIF Future Leaders visit to Silicon Valley with financial-sector participants, focusing on technology and changes in financial services.
View detailsA large euro area current account surplus need not imply an undervalued currency. Jonathan Fortun and Robin Brooks argue that persistent economic slack can suppress imports and inflate the headline external balance. Their November 2018 calculation turns the surplus into a deficit after adjusting for the economic cycle, pointing to possible euro overvaluation rather than an automatic case for appreciation.
Read the workWriting in April 2017, Jonathan Fortun explains how reducing the Federal Reserve’s balance sheet could tighten financial conditions alongside interest rate increases. The assessment anticipated asset runoff later that year and removed one rate increase from its 2018 forecast to account for that additional restraint. It also identified changes in the Fed’s Board as a risk to consistent policy communication.
View detailsWeak manufacturing had not yet spread substantially to services in September 2019, even in Germany, where the industrial recession was especially severe. Jonathan Fortun and Robin Brooks assess this divergence alongside indicators suggesting that manufacturing was approaching a bottom. Their relatively constructive global outlook remains conditional on services retaining their resilience.
Read the workListed on Jonathan Fortun's IIF author profile.
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