The March Inflation Spike: Same Energy Price Shock, Different Outcomes Inflation jumped in many countries in March after energy prices surged following the US-Israeli attack on Iran.

Today’s post: open.substack.com/pub/swissmac...

Markets price the mean, while central banks worry about the distribution “Ranges are for cattle.

“Markets price the mean, while central banks worry about the distribution” or, as President Lyndon Johnson put it, “Ranges are for cattle. Give me a number”
swissmacroandhistory.substack.com/p/markets-pr...

Lagarde signals April is live In a post published yesterday, I looked at how different energy price paths could affect inflation in the euro area and the case for ECB policy action.

The ECB is ready to raise rates
open.substack.com/pub/swissmac...

ECB and energy prices: Persistence matters This year’s ECB Watchers conference, organised by Volker Wieland at the IMFS in Frankfurt, came at a very opportune moment, just weeks after the surge in energy prices.Thanks for reading Swiss Macro a...

Some thoughts on energy prices and inflation in the euro area.
swissmacroandhistory.substack.com/p/ecb-and-en...

London

ECB Must Be Vigilant in Face of Stagflation Risks, Vujcic Says The European Central Bank must be “very agile and vigilant” to keep prices in check as the Iran war brings stagflation risks closer, Governing Council member Boris Vujcic said.

A good read.

www.bloomberg.com/news/article...

Markets wrong on UK interest rate rises, say economists Forecasters argue a weak economy will prevent the energy shock fuelling persistent inflation

I think this is right. It is important not to confuse market expectations with central banks’ intentions. They often coincide but not always.
www.ft.com/content/a341...

Re: all the stuff about 1yr inflation breakevens in the US at the end of last week. Two things are notable: 1. inflation swaps haven't moved to the same extent. 2. The 1yr 1yr fwd swap is at 2.5%, roughly consistent with the Fed's target. The market isn't pricing in an inflation problem.

The real reasons policymakers are not reacting to higher oil prices Despite a sharp rise in energy prices, major central banks did nothing last week.

Some thoughts on why most central banks left interest rates unchanged last week.

swissmacroandhistory.substack.com/p/four-facto...

Central banks talk tough on inflation after 2021-22 lessons: EFG Bank Stefan Gerlach, Chief Economist at EFG Bank, tells CNBC that central banks are still haunted by the inflationary shocks of 2021 to 2022. With several of Europe's central banks meeting today, including...

My comments this morning on the many central bank meetings taking place today.
www.cnbc.com/video/2026/0...

Central Banks and the Case for Inaction This will be an unusually busy week for central banks.

Some thoughts on why central banks are unlikely to change interest rates this week:
swissmacroandhistory.substack.com/p/central-ba...

Iran war reawakens global inflation fears The Federal Reserve, ECB and Bank of England will this week deliver their first formal verdicts on the threat posed by the conflict

An excellent read!

www.ft.com/content/d4f1... Iran war reawakens global inflation fears

Ex-Energy Inflation and ECB Interest Rate Decisions Suppose oil prices had remained near $100 per barrel after the recent conflict in the Gulf.

In today’s post I discuss the ex-energy measure of euro area inflation and argue that it does a surprisingly good job explaining ECB decisions.
swissmacroandhistory.substack.com/p/ex-energy-...

A Week That Changed the Outlook for the Bank of England A week or two can make a big difference in monetary policy.

Some thoughts on oil prices and the BoE.

open.substack.com/pub/swissmac...

Lisbon

Governor Waller on Signal or Noise, and the outlook for Fed policy Source: Federal Reserve Board

A very interesting speech by Gov Waller about the outlook for US monetary policy (although perhaps superseded by the events in the Middle East).
open.substack.com/pub/swissmac...

Not a bad view from the Quaibrücke in ZRH

Weak Q4 Growth and the Outlook for Swiss Inflation Annualised quarterly Swiss real GDP growth (seasonally and sport adjusted) in 2025Q4 was 0.6%, a marked improvement from the 1.8% contraction in Q3 (see Graph 1).

What does 2025Q4 real GDP growth in Switzerland imply for inflation (and for the upcoming SNB decision)?
swissmacroandhistory.substack.com/p/weak-q4-gr...

Lake of Zurich this morning

Inflation targeting, South African style Central banks around the world largely do the same thing: most target inflation and use a policy rate as their main instrument.

Out of interest, I read up on inflation targeting in South Africa. Here’s what that led to:

swissmacroandhistory.substack.com/p/inflation-...

We are mourning the passing of our friend Wolfgang Danspeckgruber, Founding Director of the Liechtenstein Institute on Self-Determination. Wolfgang was a dear partner and friend of the Mission for decades.

EU Governments May Want to Fast-Track Lagarde Succession at ECB European governments may choose to fast-track finding a successor for Christine Lagarde at the European Central Bank to avoid having to deal with a far-right French president after 2027 elections.

EU governments may wish to fast track Lagarde succession.

www.bloomberg.com/news/article...

Trump’s New World Order Is Pushing Sweden to Warm Up to the Euro Geopolitical concerns have bolstered interest in dropping the krona for Europe’s common currency.

I suspect Sweden will join the euro in the not too distant future:

www.bloomberg.com/news/article...

ECB: The next move is up The ECB met on 5 February.

In today’s post I argue that the ECB’s next move will be up.
swissmacroandhistory.substack.com/p/ecb-the-ne...

Small Central Banks Can’t Escape Global Interest Rates Policy rates are domestic. Financial conditions are global.

Small central banks operating independent monetary policy are constrained by global bonds markets.
open.substack.com/pub/swissmac...

Tog över centralbank efter kaos: ”Tomt blad” Intern konflikt förde henne till andra sidan jorden. Men Nya Zeelands jantelag lever hon inte upp till. ”Jag har bett om ursäkt till utrikesministern”, säger Anna Breman, landets första kvinnliga cent...

A good read, if you know Swedish and are a subscriber!

www.svd.se/a/gkaQB1/ann...

When Politics Set the Exchange Rate: The Ostmark’s Black Market Rate A historical detour

Some recent European monetary history in today’s post.

open.substack.com/pub/swissmac...

When Politics Set the Exchange Rate: The Ostmark’s Black Market Rate A historical detour

Some recent European monetary history in today’s post.

open.substack.com/pub/swissmac...

FOMC leaves rates unchanged. Here is the statement:

www.federalreserve.gov/monetarypoli...

This figure displays the kernel density estimate of banks’ pre-invasion exposure to Russian and Belarusian borrowers. Exposure is defined as the sum of outstanding loans and debt securities vis-à-vis Russian and Belarusian firms, scaled by the bank's book equity (2021 averages). The sample is restricted to banks with positive exposure that report to both the AnaCredit and SHS databases. The debate about the economic consequences of Russia’s invasion of Ukraine has focused on supply-side concerns such as soaring energy prices and severed supply chains. However, this overlooks the role of the financial sector. Using granular transaction data, this column shows that the outbreak of war acted as a ‘silent monetary tightening’. Exposed banks faced immediate higher funding costs and reduced credit supply, an effect equivalent to a policy rate hike of nearly 60 basis points, well before the ECB acted. Geopolitical tensions appear to influence both the stance and the effectiveness of monetary policy more directly and powerfully than previously assumed.

Falko Fecht, Stefan Greppmair, & Björn Imbierowicz (@bundesbank.de) show that the outbreak of war in #Ukraine acted as a 'silent monetary tightening'. Exposed banks faced immediate higher funding costs and reduced credit supply.
cepr.org/voxeu/column...
#EconSky