Mizuho's Global Economists: What Happens in a World Moving Away from Cheap Money?

Jim Gorman
Jim Gorman Director, Mizuho Americas
March 20, 2018

The second Mizuho Investor Conference NY (MIC) brought together 141 US-based and 39 Japan-based, publicly-traded companies in what was perhaps the largest multi-regional, multi-sector conference in New York City. 

Keeping with the international flavor of the conference, Steven Ricchiuto, Mizuho US Chief Economist, moderated a global economist panel examining the international sweep of central bank monetary tightening and its effects in Europe, Asia and the US.

Steven joined JG Shen, Chief Economist, Asia; Cameron Umetsu, Chief Japan Fixed Income Strategist, Mizuho International; and Christel-Aranda Hassel, Chief Economist, Europe to look at how a move away from accommodation will reverberate in the world’s biggest economies.

JG Shen, Chief Economist, Asia points out that "from the official wording, you cannot detect any change. But actually, the Chinese monetary policy has been tightened already very aggressively."

Cameron Umetsu, Chief Japan Fixed Income Strategist, Mizuho International warns of a potential conundrum saying "further easing could actually backfire in the sense of squeezing bank margins but also flattening the curve. If bond yields are falling naturally in this environment, there is no need for the BOJ to buy any JGBs (Japanese Government Bonds) so in effect there would also be tapering ... So you have easing coinciding awkwardly with a tapering."

Christel Aranda-Hassel, Chief Economist, Europe offers a very optimistic outlook, saying “Europe is definitely in a very sunny spot at the moment from an economic point of view."

But Steve Ricchiuto, who was the last to give analysis, was the most bullish. "This is going to be the longest expansion in America's history. We are already at eight years and this is going to eclipse the last longest one which was 110 months long."

To watch the entire discussion and Q&A session, please watch our video below.


5:15 - JG Shen, Chief Asia Economist
10:10 - Cameron Umetsu, Chief Japan Fixed Income Strategist
14:30 - Christel Aranda-Hassel, Chief Europe Economist
23:40 - Steve Ricchiuto, Chief U.S. Economist

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