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The first cohort of baby boomers turns 65 in 2023 and in the coming years this entire generation will retire en masse. In this article, we will assess the state in which the baby boom generation is approaching retirement in Spain, both from a financial perspective and in terms of their emotional state and their health.

Until not long ago, the financial markets had seemed to digest with relative ease the heavy dose of monetary tightening that the central banks have introduced to curb inflation. However, with interest rates increasingly entering restrictive territory – that is, at levels that should cool the economy – the risk of stress events and financial turbulence increases.

Once the pandemic is over, the very need to act decisively in monetary and fiscal terms will have repercussions that, depending on how these are managed, could affect the performance of economic policy in the future.

The independence of central banks seems indisputable, even more so in these times of pandemic, in which they have increased their use of unconventional policies and provided coverage for the high funding needs of states. In this article we will explore the theory and empirical evidence supporting the importance for central banks to maintain their independence.

The Silicon Valley Bank intervention and the shock wave it triggered throughout the rest of the international financial system has been yet another obstacle on the path towards the normalisation of the international economic cycle, it can be seen as a test for the central banks’ dual mandate.

In the continuation of the article «Advanced economy housing markets in a scenario of tighter monetary policy (part I)» we calculate the potential adjustment in housing prices which could occur in some of the international housing markets that are showing signs of overvaluation.

In many developed economies, housing prices have been rising significantly for years – a trend which only accelerated during the pandemic. However, some of those housing markets have begun to experience a correction in the current context of higher interest rates and an erosion of household real disposable income.

The AIReF has ruled that the pension spending rule agreed with the European Commission has not been violated, although it has pointed out that complying with this rule does not guarantee the sustainability of the pension system or that of the general government as a whole. Moreover, it has warned that it will be necessary to increase government transfers to the Social Security system in order to sustain it between now and 2050.

We look at the dangers of a wage-price spiral in the US and the euro area, in the current context of inflationary pressures. 

We Europeans feel that economic policy failed to live up to the circumstances during the Great Recession. Some feel this way because not all the necessary reforms were carried out – and many are still pending to this day. Others feel let down because public sector support during the crisis and the subsequent recovery was insufficient. No doubt everyone is partly right, and that explains why the frustration was widespread. This time can be different. This time must be different.

The biggest expansionary deployment from monetary policy in history is still in force today, and the recent shift in strategy by the world’s two major central banks – which let us not forget was intended to encourage an increase in inflation expectations – is currently in its trial phase.

We break down the main measures included in the War Response Action Plan, which will mobilise up to 16 billion euros in order to mitigate the impact of the war in Ukraine on the Spanish economy.

One of the hot economic topics of today is the impact that a tightening of the financial conditions will have on the cost of Spanish public debt. Since the beginning of the year, we have witnessed a rebound in euro area sovereign yields and in risk premiums of the periphery, including that of Spain. Thus, the question arises as to how sensitive the general government’s cost of financing will be to a changing and highly uncertain macro-financial environment.

The umpteenth change in the economic narrative in recent months – this time going from soft landing to no landing – appears to work in favour of the central banks’ intention to stay on the current course, to continue to raise rates and, once the peak is reached, to remain in restrictive territory for longer than previously expected.

In 2024, Spain reduced its exports to the European Union and the United States, so it had to seek out opportunities in new markets in order to diversify and strengthen its trade relations. These new markets primarily included countries in ASEAN, Latin America and the Caribbean Islands, as well as Oceania.

The Ukraine conflict is nothing more than the canary in the coal mine for the growing instability on the geopolitical stage that we can expect to see over the coming years. The greatest exponent of this heightened instability will be the rivalry between China and the US.

In an attempt to correct these market dysfunctions, there have been several reforms in recent decades, the most recent of which was approved by the government cabinet on 28 December and is being voted on today in Congress. This reform is also one of the milestones committed to with the EU as part of the RTRP, and its implementation is a requirement in order to access the European NGEU funds.

Despite the expected reduction in the deficit to around 5.0% of GDP in 2022, the Treasury’s funding needs will remain high. This leads to the question of whether it could experience difficulties in capturing this funding now that the ECB has announced that it will be reducing its purchases of public debt.

The figures for US GDP in Q1 reveal a contrast between the strength of domestic demand and trade flows that were anticipating the introduction of tariffs, while the euro area has shown accelerated growth. However, this boost could soon run out of steam: the tariffs and their consequences will begin to have a negative impact. For now, there are no clear signs of a slowdown in trade flows, but with uncertainty at peak levels, the global economy is expected to enter into a slowdown, with more risks to the downside and more questions than answers.