Macroeconomic round up: One step closer to a global recession?
Jason Walls breaks down the week's biggest news in macroeconomics on NBR Radio, and on demand on MyNBR Radio.
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More concerns over global economic health have been sparked after the OECD trimmed its global economic forecast to below 3%.
This is the second time in three months the organisation has downgraded its forecasts on the world economy.
Sound like déjà vu?
That may be because the International Monetary Fund (IMF) went down the same path last month when it downgraded its global growth forecast for 2015 from 3.3% to 3.1%.
The IMF defines a recession as 3% growth in the world economy.
Both organisations cited issues stemming from emerging markets – such as Brazil, Russia and China – as major contributing factors for the downgrade.
China is still under a lot of economic pressure.
In the space of a year, China has had six interest rate cuts, two drops in reserve requirement ratios, a tax cut and a currency devaluation.
Despite this unprecedented amount of economic stimulus, the most recent inflation figures reveal consumer prices were up just 1.3% in October year-on-year.
This data may cast more doubt over the US Federal Reserve’s impending interest rate hike, whereby market pricing suggests there is a roughly 70% chance the Fed will pull the trigger in December.
The prospects of a delay may come as good news to US Congressman Brad Sherman, who last week told US Fed chairwoman Janet Yellen to consider not raising rates because it’s not “God’s plan.”
Mr Sherman’s comments were discussed in Macroeconomic Roundup last week. Shortly after, Mr Sherman’s deputy chief of staff contacted NBR, insisting the congressman’s comments were a joke.
NBR questioned as to why Mr Sherman would make such a joke at such an important meeting, to which the staffer replied by suggesting there is room for levity during congressional work.
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NBR Radio
Fri, 13 Nov 2015
Fri, 13 Nov 2015
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
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Macroeconomic round up: One step closer to a global recession?
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