Tier. Magnitude, BoJ. Interest rate, ECB. Also ring fence balance sheet and stop making transfers/adjusting net debt. It’s absurd, and dominating fiscal policy.

Why ignore the biggest discretionary line item, which can go at the stroke of a pen: IoR?

1) The British public (via the Bank of England) pays base rate on bank reserves. Roughly £38bn annually. This is optional. Why?

@darioperkins.bsky.social ?

7) Not necessarily a bad thing - may explain avoiding recession: fiscal deficit = private sector surplus, monetary tightening easier to absorb.

6) Fiscal stimulus at full employment raises real rates across the yield curve.

5) Fiscal policy stance has only really change in US, since Covid. US is only major economy to back running economy hot - via fiscal policy. Real rates now at a critical juncture.

4) Is anything really changing to buck this trend?

3) Europe has replicated (sort of) Japan … so (bizarrely) has China.

2) Root cause may be private sector preferences/demography: Japan clearest example of arithmetic - if private sector runs surplus, public sector runs deficit.

1) Global developed market time series of the last 30 years show that as public sector debt/GDP ratios rise, real interest rates decline.

Evening. Good times … hope all is well!