Global Data Pod Weekender: Global crosscurrents

09/02/22 • 17 min

We are increasingly confident that the global economy will avoid a recession. This owes largely to improvements in the US where a resilient labor market looks set to combine with falling inflation to boost spending. By contrast, surging inflation in Europe—which surprised to the upside this week—is expected to spark a recession. And in China, headwinds are building and we lower the outlook. Against this backdrop, the Fed and ECB are still focused on getting rates above or at least back to neutral respectively.

Speakers:

Bruce Kasman

Joseph Lupton

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Speakers:

Bruce Kasman

Joseph Lupton

Previous Episode

Global Data Pod Weekender: This is not the pivot you are looking for

No mind tricks in Fed Chair Powell’s brief but forceful message that more restrictive policy is coming and the Fed will not prematurely reverse course. With another solid US jobs report expected next week, we see the Fed hiking 75bp in September. This week also saw us put a deeper recession and higher inflation into our Euro area outlook, whereas more fiscal support in China reduces the downside risks to growth there.

Speakers:

Michael Hanson

Daniel Silver

Next Episode

Global Data Pod Weekender: L’Insoumis

While Europe remains the weakest link in the global outlook, rapidly rising natural gas inventories combined with continued large doses of fiscal support are tempering downside tail risks. Risks remain skewed to the downside in China. Against this backdrop, major DM central banks are on track to hike at the fastest pace this quarter since 1980. With the inflation threat still unvanquished, more hikes are to come.

Speakers:

Bruce Kasman

Joseph Lupton