SNAPSHOT2 min read
Janet Mui: 2019 third quarter update
In two years the global economy has gone from synchronised growth to synchronised slowdown. Our stance has become more cautious, but we do not expect a recession
Authors
- Two years ago the majority of the world economy was growing. Today the reverse is true as economies come together in a synchronised slowdown.
- Weakness is focused on manufacturing, and triggered by the ongoing trade dispute between the US and China.
- Despite the slowdown we do not expect a recession. This is because the spillover from manufacturing weakness into the services sector is so far relatively contained. In the US, the services sector is a far greater part of the overall economy than manufacturing.
- US consumers are in a comparatively robust position: they are helped by lower levels of household debt and lower interest costs.
- Central banks including the Federal Reserve have been cutting rates to support the global economy, but their ammunition is limited.
- The key topic in financial markets is whether governments will ride to the rescue with supportive fiscal policies. Again, in many developed markets, governments' headroom for fiscal action is limited.
Authors
Topics
Federal Reserve
Quarterly Report
Snapshot
Economic & Strategy Viewpoint
Video
Market views
Central banks
Europe ex UK