Was this email forwarded to you? Sign up here.
Illustration: Rebecca Zisser/Axios
Central banks have unloaded trillions of dollars of stimulus in efforts to push inflation above 2% in countries from the U.S. to Japan and across the eurozone, but nothing seems to be working.
Driving the news: One radical idea that could boost spending and help resuscitate moribund economies is Silvio Gessell's proposal for depreciating money, writes Stephen Mihm, an associate professor at the University of Georgia, in an editorial for Bloomberg.
What it means: Money, if not spent, would lose its value by 5% a year. That would encourage people to spend, rather than hold onto it. Such a plan would radically boost the "velocity" of money, giving a major boost to developed economies where services account for a hefty majority of economic growth.
The idea has been tried before. The mayor of Wörgl, Austria, used the town’s funds to put Gesell's depreciating currency into rotation and managed to stimulate a minor boom in the midst of the Great Depression.
The bottom line: While it's unlikely the Fed will be jumping on the Gesell bandwagon anytime soon, Mihm says that the idea of a depreciating currency could serve the U.S. and the global economy in the event of another downturn.
Following a yield curve inversion in March that sent tremors through financial markets, the spread between 10-year Treasury notes and 3-month T-bills has reversed and widened.
The inversion caused significant worry among economists and some market participants as it is one of the most reliable financial market recession indicators available.
Yes, but: While a prolonged inversion would have been worrisome, analysts say the market isn't signaling all is well with the economy just yet.
What to watch: Rajappa says, the rise in yields hasn't pushed the spread between 10-year and 3-month Treasuries that much higher. The difference of 15 basis points is still very tight and near levels seen in 2007.
Bonus: The yield curve is still inverted on the short end with 1-month bills holding higher yields than maturities as long as 5 years.
China's fiscal and monetary stimulus measures have been credited with turning around the country's economy and perhaps underpinning a rebound in European and global trade this year by high-minded economists, including at the IMF.
Why it matters: The congratulations may be a bit premature, a new report from the OECD suggests. While the stimulus has helped improve economic data, China has worsened a problem that was already "excessive and unsustainable."
What they're saying: Ed Yardeni, president and chief investment strategist at Yardeni Research, points out that while China's headline numbers look good, the growth in GDP is increasingly a direct result of fiscal stimulus.
Half of the top investments banks advised on fewer deals in the first quarter than the prior year period, but the deals were bigger, Axios' Courtenay Brown writes.
Research from analytics firm GlobalData shows the usual suspects again topped the list of advisers on the biggest M&A deals in the first quarter, but it was their participation in just 2 deals that made the difference: Bristol-Myers Squibb's purchase of Celgene, and Saudia Aramco's deal to acquire a majority stake in Saudi petrochemical company SABIC.
Between the lines: Advisers typically pocket M&A advisory fees that are based on the total transaction value.
Stephen Moore, a potential nominee by President Trump to the Fed, called into North Dakota's WZFG AM 1100 to make his case to join the central bank Tuesday.
Moore said that while he would be an independent voice on the Fed, he "loves Trump" and he thinks that's a good thing. He accused detractors of attempting to stall his nomination because they oppose the president.
"They're pulling a Kavanaugh against me ... the easy thing to do would just be to throw in the towel and say, 'I don't need this.' I'm taking a 68% pay cut to do this job. I mean, it's true public service. The people who keep me going are the people who love what Trump is doing and love the growth rate of this country and love the prosperity that Trump is bringing."
The S&P 500 and Nasdaq hit record closing highs Tuesday. The Dow Jones Industrial Average gained 145 points to close just 1.1% from its all-time high.