Global central bankers are again in the driving seat when it comes to
propping up the world economy, but many are demanding governments
join them in the rescue effort.
Amid
slowing global growth, the Federal Reserve, European Central Bank and
perhaps even the Bank of Japan are all set to ease monetary policy in
coming months. But with less room to act than in the past, their leaders
are telling politicians they will need to assist if a downturn takes
hold.
The pressure could be applied in person on Wednesday when central
bankers and finance ministers from the Group of Seven nations meet for
talks north of Paris. They convene at a
hazardous juncture
for the global economy, as an unpredictable trade war risks
precipitating a deeper downturn, and some bond markets hint at a growing
possibility of a recession.
G-7 host nation France may even offer a reason to take note. President
Emmanuel Macron’s 17 billion euros ($19.2 billion) of support for
consumers in response to the Yellow Vests protests may have been
contrary to his deficit-reduction mantra, but is proving fortuitous amid
a global slowdown. French growth in 2019 is expected to outpace the
euro-area average for the first time in six years.
“We are seeing political risks rising everywhere, so addressing the
lack of growth that benefits all is quite urgent,” said Laurence Boone,
chief economist at the OECD. “That cannot be achieved only through
monetary policy.”
France’s GDP is expected to be more resilient than peers this year.
While Powell of the US has warned the U.S. fiscal position is unsustainable in the
long-run, he said last week it’s “not a good thing to have monetary
policy being the main game in town.”
The U.S. got a boost in 2018 from
President Donald Trump’s $1.5 trillion tax overhaul, but that effect is
fading.
Read more at: Central Bankers Are Sick of Rescuing the World Economy Alone - Bloomberg
The Digest Group
Almere-Digest
EU-Digest
Insure-Digest
Turkish-Digest
For additional information, including advertising rates - e-mail:Freeplanet@protonmail.com
