Antonio Fatas

Graph of the VIX volatility index and DXY dollar index from 1 January to 26 August 2025. A dashed vertical line identifies 'Liberation Day'. There is general agreement that a currency’s safe-haven status can be gauged by its response to changes in financial volatility. This column documents how, in the months following the Trump administration’s “Liberation Day” announcement, the dollar switched from rising during periods of market volatility to falling, and thus appeared to switch from a safe-haven to a ‘risk-on’ currency. Its reversion to traditional flight-to-safety behaviour in recent months may indicate that this ‘risk-on’ episode was a one-time event, but it is also possible that even as financial markets have calmed down, foreign entities are taking steps to reduce their dependence on the dollar for trade, payments, and investment.

Steven Kamin analyses how, in the months following 'Liberation Day', the dollar switched from rising during periods of market volatility to falling, and thus appeared to switch from a safe-haven to a 'risk-on' currency.
cepr.org/voxeu/column...
#EconSky

Blair role in Gaza politically crass and insulting to Palestinians. Yet I almost feel sorry for him. Most brilliant leader of his generation reduced to ventriloquist's dummy for Larry Ellison and lackey to Trump in desperate quest for relevance. Politics sometimes ends in tragedy as well as failure.

"experts say"
www.cnn.com/2025/08/11/b...

🧵 (1/7) With @knittelmit.bsky.social and @cwolfram.bsky.social, happy to announce our new paper on “Who Bears the Burden of Climate Inaction?”, just posted for BPEA @brookings.edu.

We find large climate cost impacts that vary by both geography and income.

www.brookings.edu/articles/who...

Stablecoin issuer Circle examines ‘reversible’ transactions in departure for crypto President says sector should learn from traditional finance and allow refunds in cases of fraud or disputes

It has never been about the technology or any real innovation in digital money and payments. It has always been about regulatory arbitrage.

Industrial, mfg prodn, retail sales all above consensus... #EconSky
econbrowser.com/archives/202...

EJ Antoni says the recession is *here*!!! (as of August ***'24***) #EconSky
econbrowser.com/archives/202...

A post this morning from Keir Starmer on Elon Musk's X in which he welcomes American financial investment into the UK and makes no comment on other matters

good that Keir has broken his silence this morning to ... continue posting on a website run by a man who yesterday addressed a far right rally to call for his overthrow, while not in any way addressing said far right rally

It appears that Lisa Cook held off "proving her innocence" because she thought (rightly) she shouldn't have to. To have the courage to do that when the US state is attacking you is pretty darn admirable.

Poland says Russia’s drone incursion ‘wasn’t a mistake’ after Trump’s speculation – Europe live Donald Trump appeared to be dismissive Thursday night as he said it ‘could have been an mistake’ Poland’s political leadership appears increasingly concerned by the muted US response to Thursday’s Russian drone incursion into Polish airspace. As more and more European partners condemn the incident and declare their support for Poland with concrete offers of help, the US president, Donald Trump, appeared to be more dismissive last night as he said it “could have been an mistake”. Continue reading...

Poland says Russia’s drone incursion ‘wasn’t a mistake’ after Trump’s speculation – Europe live

You Really Need to See Epstein’s Birthday Book for Yourself This time, the conspiracy theorists were right.

I wrote about what I think is a genuinely revealing document of elite depravity and impunity. It is shocking and sickening. But it's also a crucial moment. We're about to see what happens when conspiracy theorists actually get what they asked for but it turns out not to be what they want.

Israel launches attack on Hamas in Qatar Explosions heard as political leadership of Palestinian militant group targeted for first time

.

I guess the father is smart enough and does not need an explanation??? IMF, you can do better [from the Finance and Development latest issue]

Comments on Beyond the Taylor Rule Credibility, expectations, and why central banks bent the rules

In a paper presented at Jackson Hole, Emi Nakamura and her coauthors examine why central banks did not follow the Taylor rule when inflation rose sharply in 2021–22. The positive commentary the paper received prompted me to read it.
swissmacroandhistory.substack.com/p/comments-o...

Congrats again to the elites who told us this guy was a credible Treasury Secretary because he went to the right schools & cocktail parties

Wow. The EU was ready to sanction Google for abusing its ad monopoly today.

But it was blocked after pressure from EU Trade Commissioner @marossefcovic.bsky.social & the U.S. DoJ.

Europe just chose Washington’s corporate interests over its own citizens.

Unprecedented. Self-inflicted.

Stablecoins could trigger taxpayer bailouts, warns Nobel laureate [FREE TO READ] Digital tokens perceived as safe assets come with hidden risks for retail investors, says Professor Jean Tirole

Shitshow waiting to happen

on.ft.com/41sHC8D

I'm often asked why dire predictions about how Trump would destroy economy haven't (yet) come to pass.
Part of the answer is that he's paused/delayed/reversed some things (e.g., TACO on tariffs).
But part of the answer is about actions like this, on student visas...

Now that we're experiencing life under authoritarianism in the US, I'm struck by how it's a lot like living in a high-crime environment. (I grew up in Rio de Janeiro.) 1/

Tariff inflation effects are just getting started.

(via Apollo)

Graph of stablecoin market growth vs US M2 and Treasury holdings, 2020-2025. Digital currencies pegged to fiat money face a built-in tension between credibility and competition, creating a ‘stablecoin paradox’. This column analyses the competing frameworks of the US and China to address the paradox. The US (under the GENIUS Act) combines strict reserve rules for privately issued, fully backed dollar stablecoins with market incentives that encourage expansion. Meanwhile, China’s approach centres on a central bank digital currency deployed domestically and extended across borders. Further expansion of the digital currency system will require backstop access, global coordination on regulation, limits on intermediation, and integration with payment systems.

Digital currencies pegged to fiat money face a built-in tension between credibility and competition. @eduardoyeyati.bsky.social‬ & Sebastian Katz analyse competing frameworks in the #US and #China to address this
#stablecoin paradox.
cepr.org/voxeu/column...
#EconSky

They will be competitive but if regulations are relaxed in the US what is the advantage of issuing offshore stablecoins? Cross-border payments are not solved with stablecoins unless everyone adopts the same one. Or we create new rails that connect all of them - doubtful.

But today US citizens can hold yield bank accounts abroad... if the other country allows them, which is not always obvious. Isn't the issue more domestic as stablecoins paying an interest will be a competitive alternative to bank deposits?

We Are All Lisa Cook Nobody is safe from weaponized government

If you think the attack on the Fed's Lisa Cook has nothing to do with you, you're wrong — any one of us may be next paulkrugman.substack.com/p/we-are-all...

Lisa D. Cook, Member, Federal Reserve Board of Governors

“President Trump purported to fire me “for cause” when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”

Very good article by @martinsandbu.ft.com. I am still debating whether pragmatism now to prepare for a future confrontation might make sense. But when I hear European leaders praise Trump I do feel like the title of this article: they are selling our soul.

Europe is selling its soul to Trump What masquerades as pragmatism is self-harming opportunism

Europe is selling its soul to Trump on.ft.com/3JBTEGx | opinion

This is something the Administration would know if they read Lisa Cook’s work instead of attacking her. Arguably, her research has never been more relevant to the Fed’s mission. One has to assume innovation and biz formation by immigrants is falling right now.

Yes, and probably trying to distance himself from others. Not the first time he does it.

The pressure on the independence of the US Federal Reserve is as bad as some of us had feared. I would love to understand what motivates this optimistic perspective from Raghuram Rajan