The Growing Risk of Global Disorder
Contrary to many Western analysts’ expectations, the shift from a unipolar to a multipolar world economy will not lead to a China-led alternative order but to global instability. Amid deepening economic fragmentation, leaders must forestall a rapid descent into chaos by strengthening the existing multilateral architecture.
Beware the New Consensus on the Global Economy
Despite an increasingly challenging economic and geopolitical environment, the global economy performed better than expected over the past year. But although analysts’ projections for 2023 were too pessimistic, it appears that consensus forecasts for the coming year may have have swung too far in the opposite direction.
Simplifying a Complicated Global Economy
With so many moving pieces, and under such unconventional conditions, navigating today’s global economic landscape would be challenging for anyone. But even if we cannot anticipate every contingency, we can understand quite a lot by assessing the US Federal Reserve’s prospects for engineering a soft economic landing in the near term.
Why the Fed Is Hard to Predict
The US Federal Reserve is adrift, and it has only itself to blame. Regardless of whether its policy-setting committee announces another interest-rate hike in June, its top priority now should be to address the structural weaknesses that led it astray in the first place.
What Happens in the Banking Sector Won’t Stay There
The sudden loss of confidence by depositors in some US banks is causing many to focus on the scope for financial contagion and the needed policy responses. What should not be overlooked is the other, and slower, contagion channel in play — that involving enablers of economic growth...
Why the Fed Should Raise Rates by Half a Percent
Having oscillated between anticipating another 50-basis-point interest-rate increase by the Federal Reserve next week or a downshift to 25 basis points, traders have settled solidly on the latter, guided both by Fed officials’ comments and by media reports.
The Fed Should Think in Terms of a Trilemma
After the Federal Reserve meets Nov. 1 and 2 this week, we may know more about how this Fed will be remembered: as a Volcker Fed that decisively conquered inflation or, instead, a Burns Fed that allowed the country to slip into a stagflationary quagmire.
Why Investors Are Facing Even More Market Instability
Frequent flyers are accustomed to turbulence on some flights. Indeed, many expect it. Despite such anticipation, however, the turbulence can once in a while create significant anxiety among even the most seasoned travelers.
Federal Reserve Must Do More Than Raise Rates by 75 Points
While the market chatter in the run-up to Wednesday’s Federal Reserve interest rate decision has understandably focused on whether the increase will be 50 or 75 basis points, the critical issue in play is a broader one.
Don’t Wish for the Fed to Pause Rate Hikes in September
Last week’s rising stock prices suggested that many investors are still wishing the Federal Reserve will step in to counter downward pressures on the market. Hopes for this “Fed put,” however, may be confusing the Fed’s willingness to act with its ability to do so.
Fed Needs to Do More Than Raise Interest Rates
With so many analysts, not to mention market pricing, having settled on a 50-basis-point interest rate increase by the Federal Reserve this week, it would be understandable to assume that it’s a “done deal” when it comes to what the central bank will announce at the conclusion of its policy meeting on Wednesday. The situation could not be further from the truth.
Ukraine War Hastens Investor Migration to Private Markets
Much of the commentary about the Ukraine war’s implications for the investment-management industry has tended to be both immediate and narrow, particularly in discussions about the spillovers for different segments. By zooming out, however, some longer-term ramifications become more apparent for both public and private markets.
Markets Are Pushing Fed Into Developing-Economy Territory
Judging from price movements on Monday, the Federal Reserve risks slipping further into a no-win interaction with markets that is more familiar to developing countries that lack policy credibility than to a systemically important central bank — let alone the world’s most powerful one.
Federal Reserve Faces a Policy Dilemma of Its Own Design
The Federal Reserve is in a deep hole of its own making as its top policy committee meets this week to announce the start of a long-anticipated cycle to raise interest rates. Inflation is at a 40-year high and still accelerating, the Fed’s inflation-fighting credibility is damaged, and it has lost control of the monetary policy narrative.
‘Buy the Dip’ Is No Longer a Sure Thing for Investors
Whether it was friends or total strangers, everyone seemed to have the same question for me on a recent trip. Is it time to buy the dip in stocks? After all, U.S. stock markets have already had a few encouraging bounces in the past two weeks of trading, though they proved both temporary and more than fully reversible.
Global Markets and Economy Can’t Escape War in Ukraine
Tragically, life has been upended for those who were living in a peaceful Ukraine only a few days ago. Now their country is under intense military attack and creeping occupation. Many fear for their lives. Others have become refugees.
Taming the Stagflationary Winds
Rising inflation and declining growth are more likely to be a part of the global economy’s upcoming journey than features of its destination. But how policymakers navigate this journey will have major implications for longer-term economic well-being, social cohesion, and financial stability.
CPI Report Can’t Settle the Big Inflation Debate: Mohamed A. El-Erian
Interpretations of Wednesday’s consumer price index data, which in recent months has become as eagerly anticipated as the jobs report, are a reminder of why President Harry Truman once pleaded for “a one-handed economist,” adding that “all my economists say ‘on the one hand,’ then ‘on the other.’”
Adapting to a Fast-Forward World
The world is going through a period of accelerating change, as four secular developments illustrate. Firms and governments must make timely adjustments, not only to their business models and operational approaches, but also to both their tactical and strategic mindsets.
The Global Economy’s Luck May Run Out
Compared to this time last year, the prospects for markets and the global economy heading into 2020 are surprisingly bright. But look further ahead and you will encounter deep uncertainty, suggesting that policymakers around the world would do well to implement inclusive-growth policies sooner rather than later.
How the IMF Can Battle Gradual Irrelevance
These days, the International Monetary Fund’s policy recommendations – especially as they pertain to the advanced economies – have little impact. Although this is partly a consequence of more inward-looking national politics in richer countries, the Fund itself is not blameless.
Why Markets and Political Scientists Disagree on the G7
Contrary to the warnings of some political analysts, even after the recent debacle in Canada, the G7 can and will play a role – albeit a less important one – on the global stage. But that does not mean that the summit's failure was cost-free.
Oil’s Uncertain Comeback
Unless there is a notable geopolitical shock, traditional oil producers should treat the recent oil-price gains as a temporary windfall, not a permanent state of affairs. To prolong the price recovery as long as possible, they should reinforce their collective production discipline.