Emerging market central banks playing catch-up
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Global growth shaken, central banks stirred
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Virus, volatility and valuations
In reaction to the coronavirus epidemic governments across the world have enacted measures unprecedented in recent decades, including closing national borders, setting up quarantine zones, restricting travel and closing factories and schools. Economic activity in China has slowed sharply and disruptions to international supply chains are impacting global trade and production with the slump in […]
Asian central bank policy rates – scalpel not knife
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What you may have missed and why it matters
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Early Christmas for (still weak) global growth
There is a growing consensus that global economic growth will slowly recover in 2020, particularly in the second half of the year. We made this prediction nearly four months ago in Central banks to the rescue…with a lag (27 August 2019), pointing to the positive, lagged impact of central bank rate cuts on global GDP […]
The key quartet: US income, confidence, net worth and consumption
In US Consumer – From King to Prince (8 October 2019), we argued that “the recent fall in US consumer confidence, slowdown in income and wage growth and jitters in US equity markets suggest that Personal Consumption Expenditure (PCE) growth remained weak in September and thus slowed materially in Q3” (September data are due on […]
US consumer – From king to prince
It is perhaps obvious that Personal Consumption Expenditure (PCE) – or consumer demand – is critical to US economic growth. PCE growth has accounted for over 80% of US real GDP growth since end-2013 (see Figure 7), thanks to its relative size (nearly 70% of GDP) and the fact that PCE is the only demand […]
Room and need for more central bank rate cuts
Central banks across the world have been cutting their policy rates in unison since early May, in line with our forecast back in January that “policy rate cuts, which have all but disappeared since last Spring, may yet resurface in the second half of 2019 (see Forecast Update: Brexit, FX, central banks & GDP growth, […]
“Currency wars” not central banks’ end-game
Not a day passes without the media and US President Trump pointing the finger at “currency wars” and “competitive devaluations”. The thrust of the argument is that central banks across the world, in a “race to the bottom”, are cutting policy rates and in the case of the ECB resuming QE, in order to weaken […]