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 Fed's latest report on financial stability indicated elevated valuations for risky assets versus Treasuries, while valuations for residential and agricultural properties are also historically high.</li>
<li>Residential mortgage and company debt do not pose major risks to financial stability due to high levels of equity in owner-occupied real estate and robust corporate profits. </li>
<li>Continued fiscal profligacy poses the greatest threat to the US financial system via the banking system and raising the cost of capital for the corporate sector. </li>
</ul>


The Fed's latest report on financial stability indicated elevated valuations for risky assets versus Treasuries, while valuations for residential and agricultural properties are also historically high.
Residential mortgage and company debt do not pose major risks to financial stability due to high levels of equity in owner-occupied real estate and robust corporate profits. 
Continued fiscal profligacy poses the greatest threat to the US financial system via the banking system and raising the cost of capital for the corporate sector. 


Fed's Latest Financial Stability Report Highlights Pitfalls of Fiscal Profligacy

<ul>
<li>President-Elect Trump has threatened to impose 25% tariffs on imports from Canada and Mexico and an additional 10% tariff on China. Hitherto, US financial markets have remained relatively calm.</li>
<li>The relationship between the incoming Trump administration and the Fed could be  contentious by tariffs reducing the scope for monetary policy easing due to higher inflation.</li>
<li>The long-term outcome of tariffs depend on exchange rate movements and willingness of foreign producers to accept lower profit margins. Tougher export conditions could force the Fed to ease policy.</li>
</ul>


President-Elect Trump has threatened to impose 25% tariffs on imports from Canada and Mexico and an additional 10% tariff on China. Hitherto, US financial markets have remained relatively calm.
The relationship between the incoming Trump administration and the Fed could be  contentious by tariffs reducing the scope for monetary policy easing due to higher inflation.
The long-term outcome of tariffs depend on exchange rate movements and willingness of foreign producers to accept lower profit margins. Tougher export conditions could force the Fed to ease policy.


Trump Tariff Plans and Fed Policy: Dovish Twist in the Tail?

<ul>
<li>While US equities have already discounted better times under a second Trump administration, the dollar is continuing to appreciate based on better growth expectations, particularly versus the UK and Eurozone.</li>
<li>After years of excessive regulatory requirements on banks, rumours are abound that the new Trump administration will revoke Basel 3 capital requirements to boost lending to the real economy.</li>
<li>The Trump administration will face legislative barriers via filibusters. Financial markets will not give the second Trump administration an indefinite carte blanche with respect to any profligate fiscal policy conduct.</li>
</ul>


While US equities have already discounted better times under a second Trump administration, the dollar is continuing to appreciate based on better growth expectations, particularly versus the UK and Eurozone.
After years of excessive regulatory requirements on banks, rumours are abound that the new Trump administration will revoke Basel 3 capital requirements to boost lending to the real economy.
The Trump administration will face legislative barriers via filibusters. Financial markets will not give the second Trump administration an indefinite carte blanche with respect to any profligate fiscal policy conduct.


Trump Trades Remain Intact, but Markets Will Not Offer Total Freedom on Fiscal Policy

<ul>
<li>Declining political approval ratings were sending a clear message to the Democrats that all was not well during the current post-pandemic economic recovery, notably tight household finances for many.  </li>
<li>Markets are discounting only 50 basis points of Fed easing in 2025, raising the spectre of criticism about political bias against the incoming Trump administration's fiscal policy agenda. </li>
<li>Chairman Powell will argue that policy is data-dependent. The magnitude of recent easing cannot be justified by incoming information over this period, thereby exposing the Fed to potential flak.</li>
</ul>


Declining political approval ratings were sending a clear message to the Democrats that all was not well during the current post-pandemic economic recovery, notably tight household finances for many.  
Markets are discounting only 50 basis points of Fed easing in 2025, raising the spectre of criticism about political bias against the incoming Trump administration's fiscal policy agenda. 
Chairman Powell will argue that policy is data-dependent. The magnitude of recent easing cannot be justified by incoming information over this period, thereby exposing the Fed to potential flak.


Fed to Face Accusations of Political Bias as Baseline Policy Outlook Shifts

<ul>
<li>The decisive outcome of the US presidential election has significantly reduced the uncertainty facing financial markets due to their familiarity with President-elect Trump's policies during his first term.</li>
<li>President-Elect Trump has a complex past relationship with the Fed. There are fears that pressure will be exerted on the Fed to boost growth at the cost of higher inflation.</li>
<li>US fiscal policy conduct will be closely monitored by the Treasury market which is discounting fewer policy rate reductions by the Fed in 2025. Fed policy conduct will remain data-dependent.</li>
</ul>


The decisive outcome of the US presidential election has significantly reduced the uncertainty facing financial markets due to their familiarity with President-elect Trump's policies during his first term.
President-Elect Trump has a complex past relationship with the Fed. There are fears that pressure will be exerted on the Fed to boost growth at the cost of higher inflation.
US fiscal policy conduct will be closely monitored by the Treasury market which is discounting fewer policy rate reductions by the Fed in 2025. Fed policy conduct will remain data-dependent.


Second Trump Presidency: Growth Focus Will Support Equities, but Challenge the Fed

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

Fed's Latest Financial Stability Report Highlights Pitfalls of Fiscal Profligacy

The Fed's latest Financial Stability Report conveys high financial asset and real estate valuations. Private sector debt was not deemed to pose...

DeSaque Macro Research

Trump Tariff Plans and Fed Policy: Dovish Twist in the Tail?

President-elect Trump announced 25% tariffs on imports from Canada and Mexico and an additional 10% tariff on China. Fed policy could be impacted....

DeSaque Macro Research

Trump Trades Remain Intact, but Markets Will Not Offer Total Freedom on Fiscal Policy

Trump trades remain intact, notably a rising dollar, despite recent pauses in US equities. Financial stocks are braced for lighter regulation, but...

DeSaque Macro Research

Fed to Face Accusations of Political Bias as Baseline Policy Outlook Shifts

Low political approval ratings and subdued consumer sentiment indicated uneven US economic conditions, but the Fed's policy outlook has become less...

DeSaque Macro Research

Second Trump Presidency: Growth Focus Will Support Equities, but Challenge the Fed

President-elect Trump's election win reduces policy uncertainty for US financial markets. Pro-growth initiatives will support equities but...

DeSaque Macro Research