Echoes of the early 1980s US policy mix? With no signs of meaningful fiscal consolidation, markets are increasingly turning to the Federal Reserve to counter price shocks. (Please see my FT column from a week ago for details.) The longer this dynamic persists, the more likely the overall policy mix is to resemble that of the early 1980s: overly reliant on monetary tightening while lacking fiscal restraint—a combination that tends to bolster the US dollar and pressure interest-rate-sensitive sectors, both headwinds to balanced economic growth. In terms of the historical comparison, the silver lining is that today’s positive productivity shock is likely to materialize much faster than that seen then, which became effective in the 1990s. #economy# #markets# #growth# #federalreserve# #monetarypolicy# #fiscalpolicy# #budget#

Can Japan revitalize growth without jeopardizing fiscal health? Join Reuters' Rocky Swift for a Reuters NEXT Newsmaker with the Japanese Minister of State for Economic and Fiscal Policy Minoru Kiuchi on October 15 at 5:20 p.m. JST/ 8:20 a.m. GMT, to discuss the government's strategy amid rising borrowing costs, a weaker yen, and pressure from financial markets over Japan's public finances. Register here

Can Japan revitalize growth without jeopardizing fiscal health? Join Reuters' Rocky Swift for a Reuters NEXT Newsmaker with the Japanese Minister of State for Economic and Fiscal Policy Minoru Kiuchi on October 15 at 5:20 p.m. JST/ 8:20 a.m. GMT, to discuss the government's strategy amid rising borrowing costs, a weaker yen, and pressure from financial markets over Japan's public finances. Register here

How could a shift in Congress following the 2026 midterms affect fiscal policy, markets and the AI buildout? Explore the key questions in The Signal newsletter from the Morgan Stanley Institute:

Growth vs. fiscal sustainability. A weakening yen. Rising borrowing costs. Japan's economic crossroads demand answers. Tune in October 15 at 5:20 p.m. JST/ 8:20 a.m. GMT as Reuters’ Rocky Swift sits down with Japan’s Minister of State for Economic and Fiscal Policy Minoru Kiuchi for a Reuters NEXT Newsmaker as they discuss what's next for one of Asia's largest economies. Register here:

Growth vs. fiscal sustainability. A weakening yen. Rising borrowing costs. Japan's economic crossroads demand answers. Tune in October 15 at 5:20 p.m. JST/ 8:20 a.m. GMT as Reuters’ Rocky Swift sits down with Japan’s Minister of State for Economic and Fiscal Policy Minoru Kiuchi for a Reuters NEXT Newsmaker as they discuss what's next for one of Asia's largest economies. Register here: