Global Economic Recession More Likely Than Recovery in 2020: Reuters Poll
According to a recent Reuters poll, signs point to global economic growth weakening further instead of recovering in the coming months, despite central banks turning more dovish and rolling out new stimulus measures to boost their respective economies. Yields are still in the negative for a record high $17 trillion in bonds, a key indicator signaling an impending recession in the US economy.
In September, the ECB delivered a rate cut taking deposit rates deeper into negative territory and even announced its decision to restart the QE program to stimulate the weakening Eurozone economy. Although the Bank of Japan (BOJ) kept its monetary policy steady in September, further weak economic data releases could exert pressure on a review of this decision in its next policy meeting.
Another Reuters poll reveals that economic growth and inflation are expected to post only a moderate improvement in most of the leading economies worldwide. Most central banks could ease their monetary policies further in 2020, and 71% economists indicated a higher likelihood for a global economic recession than an improvement in economic growth.
The US-China trade war and Brexit uncertainties have kept markets on edge for more than a year now, and although the US and China are working on a partial trade deal, the Brexit situation looks nowhere near resolved just yet. Economists anticipate that US-China trade talks could break down and their dispute could aggravate all over again early next year while the risks of a no-deal Brexit are far from faded yet.
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