Now that the US midterm election is over, markets and the financial press are returning to a more dovish outlook and concluding that major sources of inflationary pressure were transitory after all. But it may not last, because monetary policy appears to have been following politics more closely than its practitioners want to admit.
The economy is on a path of healthy growth again. The return to positive productivity growth indicates that many of the problems are behind us and the economy will look much more normal going forward.
The European direction of the new right-wing government remains uncertain. The only certainty is that the continuation of the policy followed in the past can only aggravate the crisis.
