Listen: Recession risks and the race for rate cuts
In this week’s THINK aloud, we bring you the highlights of our live quarterly webinar, where we discussed the fresh urgency to cut interest rates in the US, the gradual approaches taken by central banks in Europe and the UK, the impact of elections on the economy and policy, and how all of this could drive financial markets
A US recession is not inevitable but the Federal Reserve needs to start cutting interest rates quickly and aggressively to avoid one, according to ING’s Chief International Economist James Knightley. The Fed is widely expected to kick off its easing cycle this month after keeping rates in a range of 5.25% to 5.5% since July last year.
Global Head of Macro Carsten Brzeski says the European Central Bank, which got a head start by cutting rates in June and is expected to do so again this week, could also end up moving more swiftly and decisively next year if the eurozone labour market worsens as he predicts.
And it’s a similar picture in the UK, according to Developed Markets Economist James Smith, with the Bank of England possibly set to surprise markets by cutting rates more than currently expected over the coming year.
For the currency markets, the nature of the easing cycle will be key. But Global Head of Markets Chris Turner says the US election could also prove to be a pivotal moment for markets in November.
In this week's THINK aloud, Senior Editor Rebecca Byrne sits down with the team to find out more.
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