Global Current Account Balances Widen, Reversing Narrowing Trend
Inflation, Interest Rates, The War in Ukraine & Commodity Prices, Labor Markets and The Great Repricing
Compounding Thoughts • Making Sense of the Macro
As previously shown, Japan has a rather balanced trade situation, and has a current account surplus. This presents a natural “floor” for the currency vs other currencies.
On the other hand, the United States has a structural multi-decade trade deficit and current account deficit.
Because the US trade deficit is so large and structural, when we shift
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