A global economic growth rut risks deepening, despite expectations that major central banks will cut rates or ease policy further, according to Reuters polls of over 500 economists who remain worried about the U.S.-China trade war.
Major sovereign bond yields have tumbled as recent economic data have mostly underscored those concerns on growth, which appears to be slowing across most industrialized and important developing economies.
But at the same time, stock markets have rallied on hopes of easier monetary policy, despite clear signs that trade conflict and geopolitical uncertainty are undercutting investment and activity.
Increasing pessimism is clear from the latest Reuters polls taken July 1-24, which show the growth outlook for nearly 90% of over 45 economies polled was either downgraded or left unchanged. That applied not just to this year but also 2020.
“As uncertainty around trade policy is unresolved, the impact on the growth outlook is becoming more pronounced. We project global growth to slow even further, and any sustained escalation from here raises recession risks,” said Chetan Ahya, global head of economics at Morgan Stanley.
“While we believe that the easing cycle will be back in full swing, the drag from elevated uncertainty should still weigh on the macro outlook,” he added.
With the broad shift away by the world’s two biggest economies from freer trade toward tariffs, over 70% of around 250 economists who answered an additional question said a deeper global economic downturn is more likely than previously expected.
While the remaining respondents still expect a global rebound from the current rut, economists were split nearly 50-50 on that question only three months ago.
Lowered growth expectations came despite almost universal expectations of a Federal Reserve rate cut next week and more to follow, and renewed easing from the European Central Bank soon.
ECB President Mario Draghi, worried about inflation stuck well below target, said on Thursday, “This outlook is getting worse and worse” and hinted strongly that more easing is coming.
Peter Dixon, economist at Commerzbank, said, “But it is questionable whether monetary easing will actually achieve much. We are running out of monetary options and perhaps governments need to think about their fiscal alternatives.”
START OF A NEW EASING CYCLE
Nearly two-thirds of economists predicted trade tensions between the United States and its trading partners would intensify this year, and over 80% of respondents say this is the start of a global easing cycle.
While global growth forecast to average 3.2% this year lines up with the International Monetary Fund’s latest projection, it marks the lowest since polling began two years ago for the period.
“Even without another acceleration of the trade war between the U.S. and China or the re-opening of another front in Europe or elsewhere, the global economy is already slowing down further,” said Stefan Koopman, senior market economist at Rabobank.
“This was highlighted in recent (purchasing managers’)surveys, which painted a pretty consistent picture, regardless of whether one looks at Asia, the U.S. or Europe. With growth likely to lose momentum further ... there is also more uncertainty about whether core inflation will ever pick up again.”
Indeed, the other most striking finding from Reuters polls this month was the inflation outlook, which most major central banks target to base their monetary policy framework.
Inflation across most countries is forecast to remain below central banks’ mandated targets, or in some cases not expected to rise significantly.
Most major central banks turned to a holding pattern earlier in the year from some form of tightening path expected beforehand. Now expectations have moved to a series of interest rate cuts and/or launch of other policy easing measures.
The chances have increased that the next policy move by the Bank of Japan is likely to be easing further.
While the Bank of Canada is predicted to diverge from the path of its peers, it is likely to follow the Fed at some point.
Central banks in most major emerging market economies from Asia to Africa and Latin America have also turned dovish. The Reserve Bank of India, which has already cut rates three times this year, is set to do so again next month.
“With softer growth, limited inflation pressures globally, and with advanced markets’ central banks...having signaled monetary easing ahead, emerging markets’ central banks are largely following the same script,” noted Sudeep Sarma, head of Asia-Pacific research at Barclays.
Expectations in the July 16-24 poll for the first rate cut in more than a decade have firmed this month after several Fed members have strongly hinted policy easing is coming soon, pushing U.S. stocks to new record highs.
While that lines up with most major central banks, which have turned dovish in recent months, the latest poll shows economists, like financial markets, have settled on a 25 basis point cut in the federal funds rate to 2.00-2.25% rather than a half-point reduction.
Over 95% of 111 economists now predict a 25 basis point cut at the July 30-31 meeting. Only two economists polled expected a 50 basis point reduction and a further two said the Fed would hold steady.
“The biggest reason for the Fed to cut rates is because it has been priced into the markets for a while now. If they didn’t follow through and cut, it would cause a bit of a shock,” said Andrew Hunter, senior U.S. economist at Capital Economics.
“I think the recent general message from the Fed seems to be that it’s more about downside risks to growth rather than the economy being already weak.”
Indeed, while some forward-looking indicators on activity in the U.S. economy have dipped, the unemployment rate is the lowest in 50 years and Wall Street is at a record high - not normally the environment for a change in the interest rate cycle.
Fed rate expectations have taken a U-turn this year, going to a holding pattern earlier in the year from a steady tightening path expected beforehand to a series of cuts. Indeed, just a month ago, the U.S. central bank was still forecast to keep policy on hold for now and ease next year.
But since then, concerns about the impact from the trade war on already-slowing growth as well as weak inflation pressure have got policymakers increasingly concerned.
“Our reasoning for policy easing - slowing growth against a backdrop of subdued inflation and elevated uncertainty - is consistent with the Fed’s reasoning for insurance cuts,” noted economists at Goldman Sachs.
“By contrast, market-implied odds are consistent with a turn in the cycle, which we do not foresee in the near-term.”
The U.S. economy likely lost momentum last quarter and is now forecast to have expanded at an annualized pace of 1.8% in the April-June period, down from 3.1% reported for the first quarter, according to the poll. Growth is expected to hover around that rate in each quarter through to end-2020.
More than 75% of common contributors from last month either downgraded their growth outlook or kept it unchanged.
The latest consensus points to another rate cut in the final quarter and nearly 40% of respondents predicted a follow-up cut was likely to come as early as September.
But interest rate futures are pricing in three rate cuts this year - in July, September and December.
Beyond this year, the U.S. central bank is forecast to keep policy on hold until 2021, the poll showed.
“We don’t think this is the start of a full-on easing cycle; rather, these cuts are about providing a bit more accommodation to offset trade headwinds,” said Josh Nye, a senior economist at RBC.
“Fifty basis points of easing would fall short of what markets are currently pricing in over the next year, but should be enough to placate investors that are concerned monetary policy has become a bit too restrictive.”
The Fed’s preferred measure of inflation - the change in the core personal consumption expenditures price index - has remained below the 2% target since the start of 2019 and is not expected shoot significantly higher anytime soon.
With the economy still growing and inflation on an even keel, there was a clear gap between what the economists say the Fed is likely to do and what they recommend.
Asked what the Fed should do at this month’s meeting, nearly two-thirds of over 75 respondents said cut rates by 25 basis points. Five said policymakers should cut by 50, while the remaining - over 25% of economists - said they should do nothing.
“The issues that are affecting the U.S. economy right now and the inflation environment won’t be helped by lower rates,” said Thomas Simons, senior economist at Jefferies.
“What is weakening economic forecasts going forward is trade tensions. Lowering rates 25 or 50 basis points is not going to change that situation. From a fundamental point of view, it doesn’t make sense to us.”
路透对500多位分析师的调查结果显示，全球经济增长停滞不前的状况有加剧的风险，尽管预计主要央行将进一步降息或放松政策。 版权声明：本文著作权归原作者所有，奇番小编欢迎分享本文，您的收藏是对我们的信任，QFanW谢谢大家支持！
主要国家主权债收益率下降，因为近期的经济数据大多加剧了这种增长担忧。大部分工业化经济体和主要发展中经济体的增长似乎都在放缓。
但与此同时，货币政策宽松的憧憬推动股市上涨，尽管有明确迹象显示贸易冲突和地缘政治不确定性削弱了投资和经济活动。
7月1-24日进行的最新路透调查显示，悲观情绪明显加重。本次调查涵盖的45个经济体中接近90%的增长前景被下调或维持不变，今年和2020年的增长预期都是如此。
“由于贸易政策不确定性尚未消除，其对全球增长前景的影响变得越来越明显。我们预计全球经济增速将进一步放慢，今后出现的任何事态持续升级都会提升衰退风险，”摩根士丹利全球经济部门主管Chetan Ahya指出。
“虽然我们相信宽松周期将全面回归，但高度不确定性的拖累应会继续压制宏观经济前景，”他补充称。
随着中美逐步从自由贸易向关税政策靠近，回答了一个附加问题的约250位分析师中超过七成表示，全球经济放缓加剧的可能性比前次预估时更高。
其余受访者仍预期全球经济将从目前的低谷反弹。三个月前分析师对该问题的回答还是接近五五开。
尽管外界普遍预期美国联邦储备委员会(美联储/FED)下周将降息，且未来料有更多降息，欧洲央行料也很快重启宽松政策，但分析师仍下调经济增长预期。
欧洲央行总裁德拉吉担心通胀远低于目标，他周四称“这种前景正变得越来越糟”，并强烈暗示即将有更多宽松政策。
德国商业银行分析师Peter Dixon表示：“货币宽松是否真的能起到很大作用还值得怀疑。我们的货币政策选项所剩无几，政府可能需要考虑财政政策。”
**开启新宽松周期**
近三分之二的分析师预计，美国与其贸易伙伴的贸易紧张情势今年将加剧，逾80%的受访者称这是全球宽松周期的开始。
尽管今年全球平均增长率预估为3.2%，与国际货币基金组织(IMF)最新的预估一致，不过却是路透调查两年前开始2019年增长预测以来的最低位。
“即使美中贸易战没有再度加剧，或者美国没有在欧洲或其他地方再开启新战线，全球经济也已进一步放缓，”荷兰合作银行资深市场分析师Stefan Koopman表示。
“近期的(采购经理人)调查报告凸显了这一点，调查显示出的情况相当一致，不论亚洲、美国或欧洲都一样。鉴于经济增长的动能可能持续流失...关于核心通胀是否还会再度升温的不确定性也更大了。”
实际上，本月路透调查另一个最受注目的发现就是通胀前景，多数主要国家央行以通胀前景为目标，做为其货币政策框架的依据。
调查预测多数国家的通胀料仍将不及央行的目标水准，一些国家的通胀率甚至料不会明显上升。
多数主要央行在今年稍早从此前预期的某种紧缩路径转为静待观望模式。目前外界的预期已经变为央行将会降息并/或出台其他政策宽松措施。
日本央行下一步政策行动为进一步宽松的可能性已经上升。
虽然加拿大央行的政策路径预计将有别于其他央行，但或许在未来某个时候还是会跟随美联储的脚步。
亚洲、非洲和拉丁美洲的多数主要新兴经济体的央行也在转向鸽派。印度样央行今年已经降息三次，下个月或将再次降息。
“随着全球经济增长趋疲且通胀压力有限，以及发达经济体央行...暗示未来将实施货币宽松，新兴经济体央行基本上也在遵循相同的模式，”巴克莱亚太研究部门主管Sudeep Sarma指出。