Navigating the Descent | Forex Factory

  • Navigating the Descent

    From pimco.com

    The steepest interest-rate-hiking cycle in decades has set global economic activity on a course that remains difficult to map, making it especially important to respect risks and to look to build portfolios capable of performing well in a variety of conditions. After major economies showed surprising resilience in 2023, we anticipate a downshift toward stagnation or mild contraction in 2024. The standout strength of the U.S. is likely to fade over our six- to 12-month cyclical horizon. Countries with more rate-sensitive markets will likely slow more markedly. With inflation easing, developed market (DM) central banks ... (full story)

Comment Options
makingmoves
Jan 9, 2024 1:35pm
Permalink
"Historically, central banks do not tend to cut rates ahead of downturns, instead easing only after recessionary conditions appear and then delivering more cuts than markets anticipate. In the longer term, we continue to expect neutral policy rates to decline to levels similar to, or slightly above, those seen before the pandemic."

...

"This year, however, U.S. growth is likely to move more in line with the rest of DM into stagnation or mild contraction. Real savings buffers should soon return to pre-pandemic levels, as inflation has eroded the nominal value of households’ total wealth."

...

"Overall, we expect DM central banks to start rate cuts closer to the middle of 2024 (potentially a bit earlier for the Fed), with the exclusion of the Bank of Japan, which we think will continue with its plans for modest rate hikes this year."
Reply

  • Related Stories

There are no posts to display for these settings.
  • Story Stats