Economic Update August 2019
Summary
Monetary efforts entrenched
The era in which major global central banks have sought to remove post-financial crisis monetary stimulus has now officially drawn to a close. This comes with the US Federal Reserve easing its policy rate for the first time since 2008. But the
Fed is only the latest in a list of global central banks highlighting downside global economic risks and weaker inflationary pressures.
Global: US real GDP growth cycles
The longest economic expansion for the least growth
Source: IFM Investors, BEA, NBER, Macrobond *expansion start year indicated in brackets
While central bankers have come to realise that monetary policy, particularly at this point in the cycle, needs help, there remains a mixed capability or desire for governments to add material fiscal stimulus, largely due to concerns around public
sector debt.
While direct fiscal stimulus is relatively easy, a reform agenda is more politically difficult, less direct and longer term. It is concerning the advanced economies of the world are threatening to “turn Japanese” with regard to a sustained
period of very low rates.
About the author
Chief Economist
Alex Joiner, PhD
Joined in 2016
Bachelor of Economics (Hons) (Latrobe University), PhD (Econometrics) (Monash University).
Alex is IFM Investors’ Chief Economist and has more than a decade of experience in the field. He is responsible for the firm’s economic, financial market and policy analysis and forecasting. Alex is also a member of the firm’s Investment Committee. Prior to joining IFM Investors, Alex was the Australian Chief Economist for Bank of America Merrill Lynch. In this role, Alex was responsible for providing economic insight and forecasts across asset classes and conveying these views to both domestic and global investors. Alex was also previously a Senior Economist at the ANZ Bank.