Download PDF
As part of Argentina’s agreement with the International Monetary Fund (IMF), the central bank switched its framework and is now targeting 0% growth in the monetary base. This aggressive approach is already having an impact on monetary aggregates, economic activity, and inflation. In October, headline inflation printed at 5.4% month-on-month, below market expectations. Annual inflation stands at 45.9% year-on-year, but should continue to slow as weak economic activity keeps prices contained. In the chart below, we plot one of the monetary aggregates, private M2 growth, against yearly inflation in San Luis province. With money supply already declining in Argentina, this should drag down inflation.
Groupthink is bad, especially at investment management firms. Brandywine Global therefore takes special care to ensure our corporate culture and investment processes support the articulation of diverse viewpoints. This blog is no different. The opinions expressed by our bloggers may sometimes challenge active positioning within one or more of our strategies. Each blogger represents one market view amongst many expressed at Brandywine Global. Although individual opinions will differ, our investment process and macro outlook will remain driven by a team approach.
