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 […]
Against a backdrop of rate hikes and jitters in the banking sector, the effects of tighter monetary policy remain the focus of our outlook for the remainder of 2023.The IMF has expressed concern about a global economy that is experiencing a gradual recovery that remains fragile, and it was noted that downside risks dominate in […]
Recent data suggest that the economy’s strong start to the year was sustained in February, with consumption growth set to accelerate in the first quarter and payroll employment growth robust, while core inflation remained too high for comfort. But the collapse of Silicon Valley Bank on March 10th has further contributed to our view that […]
Current widespread growth increases the risks that a recession will take longer to materialize, require higher policy rates, and be deeper than was expected. Global downturns are amplified when synchronized. Central banks are approaching the final stage of their tightening cycles. It will take time to ascertain the magnitude of the inflation unwind. While there […]
2022 was a year characterized by geopolitical tensions, rate hikes, and inflation concerns across regions, with significant losses across asset classes. Oil prices surged in March as the Russia-Ukraine conflict disrupted global oil trade flows, but prices reversed in the second half of the year as recession risks multiplied. The seeds for a 2023 recession […]