2019 Outlook: Global economy

Global economy expected to grow with low inflation in 2019

Dec 10, 2018 | John Greenwood

Key takeaways

  • 2018 has been a year of turmoil, but, 2019 promises to be much calmer, in my view.
  • I believe the Federal Reserve should be successful in positioning the US economy for several more years of expansion.
  • Monetary policy invariably dominates fiscal policy in the determination of inflation.

2018 has been a year of turmoil with weakness in the bond markets and two significant sell-offs in equity markets. In between there were crises in Venezuela, Argentina and Turkey; ongoing Brexit negotiations; a strong rise in the price of oil; and disruptions created by US President Donald’s Trump’s repeated trade measures — all set against a backdrop normalising US interest rates. However, 2019 promises to be much calmer, in my view.

Though individually damaging, it is my view that these geopolitical events will prove to be no more than waves on the surface of the tide which is the record-breaking expansion of the US business cycle.


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