As anticipated, the FOMC voted in March to leave the target range for the federal funds rate unchanged at 5.25% to 5.50%. This was the fifth consecutive stand pat decision, all of which have been unanimous. Broadening global economic activity should help broaden investment performance, which has been narrowly concentrated in U.S. mega-cap equities. Bull […]
Global fourth-quarter data has provided evidence that the recovery remains on solid footing, pointing to continued, but slower growth in the first three months of 2024. In the U.S., layoffs remain low, and job growth has held steady. Cooling inflation has meant that wages are now rising faster than prices. In January we maintained our […]
Despite some bumps along the way, the global economy proved resilient in 2023. Alongside an economic deceleration, we expect inflation to cool sufficiently for central banks to begin cutting rates, helping to avert a contraction in the economy. While the Fed’s goal is to pull off a soft landing, the odds are against it. Historically, […]
Global economies, overall, have performed better than expected in 2023 in the face of high levels of debt, less than accommodative monetary policy, a growing number of geopolitical tensions, and an unstable Chinese economy present challenge. Central bank hiking and cutting cycles continue around the globe and we expect that the historical pattern of rates […]
The U.S. federal government is behind a reindustrialization drive while China’s economy is sputtering and Japan is fueling growth, all while the world taps the brakes on a decades-long era of globalization. This evolution in global trade and economic policy has created a heightened sense of uncertainty over the outlook. Uncertainty about the impact of […]
Reassured by the resilience in macro data, and frustrated that inflation isn’t falling fast enough, major central banks have continued with monetary tightening. The result has been eroding purchasing power, a rising cost of living, and persistent inflationary pressures. For those facing mortgage term renewals, the higher rates remove purchasing power from their discretionary budget. […]
The global expansion underway continues to show resilience to synchronised monetary tightening. The dynamics of higher rates put constraints on demand and credit availability, undermining business sector health and expansion, resulting in downturns that are more globally synchronized, with higher terminal policy rates, leading to global recession. Evidence of moderation in global inflation such as […]
The four-decade period of stable inflation and interest rates has ended, and a new regime of greater macro and market volatility is playing out. As the global economy continues to recover from the energy crisis, we continue to expect moderate global growth in 2023-24, with a drag from the cumulative impact of monetary policy tightening […]
Globally, central banks currently face a trade-off between persisting with their pace of tightening cycles until inflation is back down to more manageable levels and triggering further distress in the financial sector. There have been some reductions in headline rates of inflation due to monetary tightening, a stabilization of commodity markets, and an easing of […]
For over a year, the global economy has avoided recession. Beneath the surface however, imbalances can be seen in the latest upturn. Much of the gain experienced globally owes to a reopening surge in China. Regional imbalances outside of China as well as sectoral imbalances have emerged as the goods-producing sector stalled last quarter after […]