Global Market - Recession fear - Before Central Banks run its full course

Global Market – Recession fear – Before Central Banks run its full course

This week we will focus on some early sign of recession or fear on recession before central banks across the world have taken its full course of actions. It is much complicated to answer it in a simple term but one of the major factors remains high energy prices & high food commodity prices due to Russia-Ukraine crisis.

Before we share our view on global factors and market reactions which did witness a change in narrative and central banks are now more focus on avoiding recession. Key objective of central banks is to maintain price stability & robust growth environment. It always has a balancing act to do to control pendulum moving on either side to extreme.

Global Market – Recession fear deepens even before Central banks steps run its full course.

1) U.K. Slaps 25% Windfall Tax On Profits Of Oil And Gas Firms
2) Xi-Li Discord Paralyzes Officials Responsible For China Economy
3) U.K. Recession Risk Makes BOE Wary Of Acting On Inflation, Pill Says
4) Supply Woes Raise Recession Risk As Fed Rejects Inflation Nuance

If next quarter US GDP data turns negative, then officially it can be termed as recession, but as of now market is expecting rate hike by 50 bps each by US Fed in upcoming June 2022 & July 2022 meeting. So, the big question how central banks will do balancing act.

We believe, Central banks will move slowly on monitory tightening because it will be tough for them to reverse their policy on interest if the move too fast from here on. Any sudden reversal on policy front will also hurt their credibility.

Click on the attachment to read the full report:

Global Market – Recession fear deepens even before Central banks steps run its full coursed-recession-fear.pdf