Can the world cope with higher interest rates? We expect the most aggressive policy tightening cycle in decades to cause a slowdown in global economic growth, not a severe downturn. The biggest risk is that inflation stays higher for much longer than we anticipate, causing central banks to raise interest rates well beyond neutral levels to quash it. We judge that an extra ~100bp of hikes beyond our forecasts might be enough to cause downside risks to crystallise. 1st June 2022
Russia’s economy is wounded, not screaming in pain Western sanctions have caused activity in certain sectors of Russia’s economy to collapse, but activity has held up reasonably well in key areas such as oil production and less import-dependent manufacturing. What’s clear, though, is that the full effect of sanctions will take years to feed through. This underpins our view that sanctions have severely reduced Russia’s medium-term growth potential. EM Drop-In (4th August, 10:00 ET/15:00 BST): Join our monthly online session on the big issues in emerging markets. In this 20-minute briefing, the team will be answering your questions about debt risks amid global tightening, the latest on the inflation outlook and much more. Register now. 3rd August 2022
Weighing up the relative prospects for stock market sectors We think the macroeconomic backdrop that we envisage is consistent with certain “defensive” sectors of the S&P 500 – utilities, healthcare and consumer staples – outperforming over the rest of this year. 17th August 2022
Private sector well placed for higher rates in major DMs In addition to revealing that higher interest rates had barely affected household and corporate finances, national accounts data for Q1 suggested that, with the exception of households in a handful of medium-sized economies, private sectors are generally well placed to cope when debt service costs rise. 19th August 2022
Is there really such thing as a ‘jobful’ recession? While history shows that recessions can begin even while employment is still rising, the current rate of payroll employment growth is far too strong to be consistent with an economic downturn. By the same token, although we think an outright contraction will be avoided, any recession over the next couple of years would almost certainly coincide with a decline in employment and rise in the unemployment rate. 11th August 2022
We’re less upbeat about OPEC oil supply Concerns about the demand outlook have dragged the Brent crude oil price towards $90 per barrel this week. But, the supply-side concerns which pushed the price over $120 per barrel not too long ago haven’t entirely vanished. Indeed, following the OPEC+ meeting this week, we are now less upbeat on supply. Oil and the Gulf Drop-In (9th Aug): What’s the outlook for oil prices and what does that mean for Gulf economic outperformance? Join economists from our Commodities and Emerging Markets teams for this 20-minute briefing. Register now. 5th August 2022
Gloomy outlook for use of agriculturals in industry Deteriorating global economic growth over the coming quarters will weigh on industrial demand for cotton, natural rubber and lumber. That said, high oil prices will offer some support to cotton and natural rubber prices, and our expectation for rate cuts in the US in late 2023 could boost the price of US lumber. 10th August 2022
The six major markets will not be the only losers Pandemic-accelerated migration patterns were already driving outperformance in the southern states. But they have also brought the poor performance of weaker markets to the fore. With those structural changes likely to continue to play out over the next few years, we expect metros such as Detroit, Indianapolis and Minneapolis to underperform in the coming years. 10th August 2022
Global trends point to a more difficult decade ahead Commercial property wasn’t initially hit by the worsening in economic conditions at the turn of the year, but there are now growing signs of anxiety. Not only that, but even if the economic gloom is short lived and any downturn is mild, we expect structural factors to make for a listless global real estate recovery. In view of the wider interest, we are also sending this UK Commercial Property Update to clients of our European and US Commercial Property Services. 12th August 2022
Capital Views Our Chief Economist's weekly note, economist interviews, highlights from our research and more No time for caution Governments should help the recovery – provided it’s with the right kind of stimulus The past fortnight has seen a growing push in some quarters for additional fiscal stimulus to bolster the recovery... 29th June 2020 A tale of two lockdowns Recovery will hinge on the confidence of involuntary savers to spend post-lockdown The pandemic has done strange things to household finances. On the one hand, it has had a devastating impact on some... 22nd June 2020 Tracking the recovery Our new indicators compare how successfully economies are shaking off the coronavirus impact Two of the questions we are asked most frequently by clients are: why has the pandemic caused more economic... 15th June 2020 After the pandemic, what next? In last week’s note I argued that there were signs that the economic collapse caused by the pandemic was bottoming out, but that the recovery was likely to be slow going and uneven. In this week’s... 8th June 2020 Turning the corner There are growing signs that the collapse in economic activity caused by the pandemic has bottomed out and a recovery is underway. Admittedly, most of the PMI surveys for May (released today) remain... 1st June 2020 Crisis has demonstrated power - and limits - of central banks The current crisis has demonstrated the huge influence wielded by central banks. But it has also revealed how some of that influence has started to wane. To understand why, it’s helpful to think about... 18th May 2020 Thinking through the consequences for debt and inflation There are growing concerns in some corners of the market about the size and scope of government and central bank support packages. Some of these concerns rest on a belief that recessions are necessary... 11th May 2020 Governments flying blind as lockdowns are lifted Since the scale of the human, social and economic cost wrought by the coronavirus has become clear, politicians have compared the challenge of fighting it to that of a major war. It is easy to see why... 4th May 2020 The effects of the coronavirus will reverberate for decades to come Last week I outlined how and when virus-induced shutdowns are likely to be eased. This week I discuss how the world may have changed when economies reopen. As I have noted before, the lockdowns have... 27th April 2020 A grand or gradual re-opening? Last week brought further evidence of the scale of the economic damage that is being inflicted by virus-induced shutdowns. Two questions now hang over markets: how and when will shutdowns end, and how... 20th April 2020 How to think about the inflationary consequences of COVID-19 Of the many questions we received during a series of webinars that we held late last month, the most common was whether the Coronavirus shock would be inflationary or disinflationary. The answer... 6th April 2020 The coronavirus is rewriting the economic rulebook The crisis caused by the coronavirus has upended conventional economic thinking. This is evident in several different ways. One is the role played by economic policymakers. Central banks have... 30th March 2020 What clients are asking about the corona crisis The economic and market dislocation caused by the COVID-19 outbreak has raised more questions than economists and market participants have answers. To quote Jay Powell, much about the future remains... 23rd March 2020 What more can policymakers do? Things are getting ugly and policymakers are swinging into action. We now find ourselves in the extraordinary position that interest rates in the US, euro-zone, Japan and the UK have now returned to... 16th March 2020 Here’s what you may have missed We’re aware that the turbulence in global financial markets over the past week has made it difficult to keep track of our various publications. With this in mind, I thought it would be useful to... 12th March 2020 2008, redux? *** Today we will be expanding the page on our website that tracks the daily spread and the economic and market impact of the coronavirus. You can see it here. We have also launched a daily alert that... 9th March 2020 Pagination Previous … Page 5 Page 6 Page 7 Page 8 Current page 9 Page 10 Page 11 Page 12 Page 13 Next
No time for caution Governments should help the recovery – provided it’s with the right kind of stimulus The past fortnight has seen a growing push in some quarters for additional fiscal stimulus to bolster the recovery... 29th June 2020
A tale of two lockdowns Recovery will hinge on the confidence of involuntary savers to spend post-lockdown The pandemic has done strange things to household finances. On the one hand, it has had a devastating impact on some... 22nd June 2020
Tracking the recovery Our new indicators compare how successfully economies are shaking off the coronavirus impact Two of the questions we are asked most frequently by clients are: why has the pandemic caused more economic... 15th June 2020
After the pandemic, what next? In last week’s note I argued that there were signs that the economic collapse caused by the pandemic was bottoming out, but that the recovery was likely to be slow going and uneven. In this week’s... 8th June 2020
Turning the corner There are growing signs that the collapse in economic activity caused by the pandemic has bottomed out and a recovery is underway. Admittedly, most of the PMI surveys for May (released today) remain... 1st June 2020
Crisis has demonstrated power - and limits - of central banks The current crisis has demonstrated the huge influence wielded by central banks. But it has also revealed how some of that influence has started to wane. To understand why, it’s helpful to think about... 18th May 2020
Thinking through the consequences for debt and inflation There are growing concerns in some corners of the market about the size and scope of government and central bank support packages. Some of these concerns rest on a belief that recessions are necessary... 11th May 2020
Governments flying blind as lockdowns are lifted Since the scale of the human, social and economic cost wrought by the coronavirus has become clear, politicians have compared the challenge of fighting it to that of a major war. It is easy to see why... 4th May 2020
The effects of the coronavirus will reverberate for decades to come Last week I outlined how and when virus-induced shutdowns are likely to be eased. This week I discuss how the world may have changed when economies reopen. As I have noted before, the lockdowns have... 27th April 2020
A grand or gradual re-opening? Last week brought further evidence of the scale of the economic damage that is being inflicted by virus-induced shutdowns. Two questions now hang over markets: how and when will shutdowns end, and how... 20th April 2020
How to think about the inflationary consequences of COVID-19 Of the many questions we received during a series of webinars that we held late last month, the most common was whether the Coronavirus shock would be inflationary or disinflationary. The answer... 6th April 2020
The coronavirus is rewriting the economic rulebook The crisis caused by the coronavirus has upended conventional economic thinking. This is evident in several different ways. One is the role played by economic policymakers. Central banks have... 30th March 2020
What clients are asking about the corona crisis The economic and market dislocation caused by the COVID-19 outbreak has raised more questions than economists and market participants have answers. To quote Jay Powell, much about the future remains... 23rd March 2020
What more can policymakers do? Things are getting ugly and policymakers are swinging into action. We now find ourselves in the extraordinary position that interest rates in the US, euro-zone, Japan and the UK have now returned to... 16th March 2020
Here’s what you may have missed We’re aware that the turbulence in global financial markets over the past week has made it difficult to keep track of our various publications. With this in mind, I thought it would be useful to... 12th March 2020
2008, redux? *** Today we will be expanding the page on our website that tracks the daily spread and the economic and market impact of the coronavirus. You can see it here. We have also launched a daily alert that... 9th March 2020
