Andreas Steno Larsen: The New Era of Fiscal Policymaking

In this interview with Real Vision’s Ed Harrison, Andreas Steno Larsen, chief global FX/rates strategist at Nordea Markets, returns to the platform with his most comprehensive interview yet. Steno Larsen outlines a world where fiscal policy has become the most important policy variable, and he believes that will have a large impact on a host of asset classes including currencies, equities, bonds, and more. Over the medium-term, the most important asset is the US dollar because of what Steno Larsen predicts will be US outperformance on growth. Eventually, other countries will catch up—but until they do, Steno Larsen is tactically long US dollars, short US bonds, long commodities, and negative on gold. He also sees the potential for a major correction in US equities. Over a longer time horizon, he sees US policies undermining the role of the dollar as the main reserve currency and believes the emergence of the Digital Yuan will hasten the dollar’s decline. On the policy front, the most important long-term change is the move to fiscal policy. Eventually, Steno Larsen believes we may come to think of the changes afoot in the developed world as heralding the emergence of Universal Basic Income as a permanent feature of fiscal policy. Filmed on April 28, 2021.

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