Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Macroeconomics

<ul>
<li>The global economic outlook for 2025 is mixed. Central bank policy rates will be lowered gradually and settle at an underlying level higher than what prevailed before the COVID-19 pandemic.</li>
<li>While US markets are discounting a soft landing, financing conditions for corporations next year will be impacted by the magnitude of the slowdown and the prospective conduct of fiscal policy.</li>
<li>Conditions in the Eurozone are expected to improve next year, while the outlook for refinancing activity in the Asia Pacific remains nuanced, courtesy of differing regional central bank policy outlooks.</li>
</ul>


The global economic outlook for 2025 is mixed. Central bank policy rates will be lowered gradually and settle at an underlying level higher than what prevailed before the COVID-19 pandemic.
While US markets are discounting a soft landing, financing conditions for corporations next year will be impacted by the magnitude of the slowdown and the prospective conduct of fiscal policy.
Conditions in the Eurozone are expected to improve next year, while the outlook for refinancing activity in the Asia Pacific remains nuanced, courtesy of differing regional central bank policy outlooks.


Peering into Corporate Financing Conditions in 2025

<ul>
<li>The Fed's policy pivot to concentrate on the labour market reflects the priorities of politicians who view full employment as the more important mandate compared to price stability.</li>
<li>Doubts about the wisdom of the Fed's aggressive policy rate reduction have increased since the release of the September Employment Situation report. Bond investors have demanded a higher term premium.</li>
<li>Surveys on household and business optimism are sending worrying signals.  Fed credibility will face communication challenges as long as forward guidance indicates easier policy but economic outlook risks remain balanced.</li>
</ul>


The Fed's policy pivot to concentrate on the labour market reflects the priorities of politicians who view full employment as the more important mandate compared to price stability.
Doubts about the wisdom of the Fed's aggressive policy rate reduction have increased since the release of the September Employment Situation report. Bond investors have demanded a higher term premium.
Surveys on household and business optimism are sending worrying signals.  Fed credibility will face communication challenges as long as forward guidance indicates easier policy but economic outlook risks remain balanced.


US Treasury Market Questions Fed's Prospective Policy Path

<ul>
<li>The People's Bank of China reduced its policy rate, lowered reserve requirements, and introduced a new lending facility to support the equity market.</li>
<li>New fiscal policy measures were announced to help consumers,  but large stimulus programmes invariably incur legacy issues that can subsequently impede the capacity of governments to counter faltering economic activity.</li>
<li>Improved Chinese equity prices need sustainment by higher corporate profits, courtesy of faster economic growth. Improved labour market conditions are essential for a recovery in consumer confidence and economic activity.</li>
</ul>


The People's Bank of China reduced its policy rate, lowered reserve requirements, and introduced a new lending facility to support the equity market.
New fiscal policy measures were announced to help consumers,  but large stimulus programmes invariably incur legacy issues that can subsequently impede the capacity of governments to counter faltering economic activity.
Improved Chinese equity prices need sustainment by higher corporate profits, courtesy of faster economic growth. Improved labour market conditions are essential for a recovery in consumer confidence and economic activity.


Success of China's Stimulus Measures Hinges on Improvement in Labour Market Conditions

<ul>
<li>There is a possibility of a repeat of the events in 2000 Q4 and 2001 Q1, when economic conditions unravelled quickly and labour hoarding crushed corporate profits and equity valuations.</li>
<li>Lower interest rates will typically support equities unless the corporate sector has committed large and persistent strategic mistakes, such as excessive investment or bad lending.</li>
<li>Unfolding political events could push the economy into recession, despite the best efforts of the Fed. Profligate fiscal policy conduct could present challenges for the economy after the election.</li>
</ul>


There is a possibility of a repeat of the events in 2000 Q4 and 2001 Q1, when economic conditions unravelled quickly and labour hoarding crushed corporate profits and equity valuations.
Lower interest rates will typically support equities unless the corporate sector has committed large and persistent strategic mistakes, such as excessive investment or bad lending.
Unfolding political events could push the economy into recession, despite the best efforts of the Fed. Profligate fiscal policy conduct could present challenges for the economy after the election.


Supportive Backdrop for US Equities, but the Events of 2000 Pose a Warning Against Complacency

<ul>
<li>The Fed has begun its easing cycle with an aggressive 50 basis points reduction in its policy rate, but, thereafter, conduct will remain data dependent.</li>
<li>Lower-Income household stress has become increasingly evident over the past year, particularly in subprime auto loans and credit cards. Lenders have tightened lending standards and accepted higher bad debt charge-offs. </li>
<li>Lower-Income households will benefit more directly from the Fed's policy shift due to their higher exposure to liabilities priced off short-term interest rates.</li>
</ul>


The Fed has begun its easing cycle with an aggressive 50 basis points reduction in its policy rate, but, thereafter, conduct will remain data dependent.
Lower-Income household stress has become increasingly evident over the past year, particularly in subprime auto loans and credit cards. Lenders have tightened lending standards and accepted higher bad debt charge-offs. 
Lower-Income households will benefit more directly from the Fed's policy shift due to their higher exposure to liabilities priced off short-term interest rates.


Aggressive Start to Fed Policy Easing Cycle Aimed at Reducing Stress at Low Income Consumers?

Said DeSaque is a  professional economist with over 35 years of experience covering the global economy, with significant expertise in the US, China, Japan and emerging markets. He worked with US investment banks for over 25 years  covering institutional investors in Europe, Middle East, Far East and Australia. Covers financial markets on a multi asset basis. Said has been an independent economist covering the global economy and financial markets for over 10 years since founding DeSaque Macro Research in London.

Said Desaque
Global Economist
• DeSaque Macro Research

Peering into Corporate Financing Conditions in 2025

Financing conditions have been resilient despite higher interest rates. Central banks have entered an easing cycle that will lower refinancing...

DeSaque Macro Research

US Treasury Market Questions Fed's Prospective Policy Path

US equity and bond markets have reacted very differently to the Fed's aggressive start to a new easing cycle. Equities have rallied, but Treasury...

DeSaque Macro Research

Success of China's Stimulus Measures Hinges on Improvement in Labour Market Conditions

Markets enthusiastically embraced Beijing's new monetary and fiscal stimulus measures. Fragile consumer confidence and weak labour market...

DeSaque Macro Research

Supportive Backdrop for US Equities, but the Events of 2000 Pose a Warning Against Complacency

The usual conditions for aggressive Fed easing are not in place. Policy is supportive for US equities, but the backdrop can rapidly change,...

DeSaque Macro Research

Aggressive Start to Fed Policy Easing Cycle Aimed at Reducing Stress at Low Income Consumers?

The Fed began its easing cycle with an aggressive 50 basis points reduction in its policy rate due to softer labour market conditions. Low-income...

DeSaque Macro Research