Beware the financial assets boom – it will only end in tears
Our view – and it is one we have stated many times – is that the issues facing the global economy are largely structural, not cyclical.
Our view – and it is one we have stated many times – is that the issues facing the global economy are largely structural, not cyclical.
The past week has been one of stark contrasts for the two sides of the ‘special relationship’ in economic terms.
With the most anticipated interest rate decision of recent times imminent, it seems the Federal Reserve is firmly stuck between a rock and a hard place.
Bank of America Merrill Lynch has said it is retaining a ‘baseline forecast’ for the Federal Reserve to raise rates in September despite the recent stock market turmoil.
Europe is becoming the world’s ‘comeback kid’ in economic terms, according to chief strategist at Julius Baer Christian Gattiker.
As news of healthy numbers in the United States today hardens expectation that the Federal Reserve will raise rates next month or very soon after, investors may be thinking everything is just as heavily advertised.
The Bank of England monetary policy committee is getting more concerned about the possibility of inflation coming through into the British economy, minutes from the July meeting revealed today.
Expectation is mounting that China is planning its own version of quantitative easing and investors weighing up how to play the world’s most populated country may struggle to assess the situation.
The minutes from the last Bank of England monetary policy meeting have revealed there remains little dissent within the committee, with all members united in holding rates steady at 0.5%.
Inflation should return to its 2% target within the next two years, the Bank of England said on Wednesday, but labour productivity remains the key uncertainty, as it downgraded its forecast for UK GDP growth from 2.9% for 2015, to 2.5%.
China’s interest rate cut announced over the weekend is widely expected to be just the latest move in a monetary loosening process that could ultimately end in quantitative easing.
Policy divergence will reach a breaking point and either drag the US and UK back into quantitative easing or trigger widespread reflation, says Rathbones’ Bryn Jones.