Monetary policy tightening lagged effects are already feeding through and this can bring G10 countries inflation closer to target and suppress growth in 2024. Most G10 central bank will likely pivot in 2024 towards cutting policy rates and the big question is when this will start and how much will occur in 2024 and 2025.
EM countries progress towards inflation target has mostly been better than G10 and this should see easing broaden across EM, as supply chain pressures/post COVID pent up demand and the commodity price shock has been reversing. However, the scale of policy easing will be more varied than G10 countries, given that the growth outlook varies across the countries that we cover.
Equities and fixed income 2024 views are a function of economic and policy forecasts, but are also dependent on geopolitics in the shape of the ongoing Ukraine war/U.S. and China desires on Taiwan reunification and a U.S. presidential election. What is the outlook for equities, government bonds, commodities and FX for 2024 and into 2025?
Continuum Economics’ December Outlook will look at these key issues.