After the Fed supercharged the bond market’s recovery, Group Chief Economist Neil Shearing talks to David Wilder about issues around 2024’s flagged rate cuts, including the impact of loosening financial conditions as investors front-run policymakers, whether “team transitory” has been proved right, and why the ECB and Bank of England are still sounding decidedly hawkish.
Plus, our EM team sees “unusually large” growth divergence coming for emerging market economies in 2024. Deputy Chief EM Economist Shilan Shah and Assistant Economist Leah Fahy highlight the key takeaways from our latest quarterly EM Economic Outlook – including how elections could shape these economies in the coming year.
Finally, the agreement among participants of the UN Climate Conference in Dubai was described as “historic”, but what was actually achieved that will help meet climate goals? David Oxley, the head of our Climate Economics coverage, separates the reality from the hype to show why some of the cynicism around the deal isn’t entirely warranted, but also explains the challenges of building out renewables to meet COP28 commitments as well as the long-term impact of the green transition on the oil market.
Analysis referenced in this episode:
Fed & markets catching up with inflation reality
Fed & markets catching up with inflation reality The Fed’s embrace of interest rate cuts next year is understandable when the latest data suggest that core PCE inflation is rapidly closing in on the 2
Europe’s central banks push back against rate cut bets
ECB is not for turning… yet In contrast to the Fed, but similar to the Bank of England, this week the ECB pushed back against expectations that it would start to cut interest rates in early 2024. (See
BoE too hawkish, investors have gone too far the other way
If the main objective this week of the Bank of England’s Monetary Policy Committee (MPC) was to keep interest rates unchanged at 5.25% and avoid fuelling even more bets on rate cuts, then it looks
r* and the end of the ultra-low rates era
The full report is available to download from the button at the top right to Global Economics, Global Markets, Asset Allocation and The Long Run subscribers, as well as to CE Advance clients. If this
Diverging Paths
Table of Key Forecasts Overview – Aggregate EM GDP growth will enter a slower phase over the coming quarters. But the headline figure masks an unusually large variation in prospects at a country level
Separating fact from myth about renewable capacity
The target from COP28 to triple global renewable generating capacity this decade is encouragingly ambitious. But as our Climate Reporting Tools show, the goal will be easier to achieve in some