Newell Palmer: Monthly Economic Notes – March 2019
In January, the US Federal Reserve put on hold its previously flagged program of interest rate rises and quantitative tightening. The European Central Bank has laid the groundwork for doing the same. The RBA has similarly signalled the possibility of interest rate cuts. The markets liked it and equity markets have rallied since January. The standard narrative is that having dealt with the GFC, central banks are trying to stimulate growth via low rates while flooding the interbank market with liquidity. This will force greater investment in risky assets, reflating the economy. Normalisation will proceed once this is achieved.
Newell Palmer: Monthly Economic Notes – February 2019
Last year, there was a notable increase in market volatility and a decline in global economic growth from its previous high in the first part of 2018. The increase in volatility was the result of a number of factors including:
increased geopolitical tensions, primarily in the form of protectionist measures by the US with its key economic partners China and Europe,
a normalisation of interest rates in the US,
tightening of liquidity
Newell Palmer: Monthly Economic Notes – January 2019
With the US moving into the later stages of the business cycle, the US Federal Reserve raising interest rates, and monetary and credit conditions diverging widely across the other major global economies, the potential for renewed volatility in both equity and fixed income markets remains high.