{"id":61982,"date":"2022-11-30T10:20:23","date_gmt":"2022-11-30T02:20:23","guid":{"rendered":"https:\/\/www.iqiglobal.com\/blog\/?p=61982"},"modified":"2025-12-02T15:58:52","modified_gmt":"2025-12-02T07:58:52","slug":"global-macroeconomic-outlook-recovery-possible-only-in-26-27","status":"publish","type":"post","link":"https:\/\/iqiglobal.com\/blog\/global-macroeconomic-outlook-recovery-possible-only-in-26-27\/","title":{"rendered":"Global Macroeconomic Outlook: Recovery Possible Only in 26\/27"},"content":{"rendered":"\n

Global economic fragilities are getting deeper into the financial markets. It is becoming clear that inflation will stay elevated and central banks will continue to hike interest rates until year-end. A total of 91 central banks have raised interest rates YTD to ward off inflation. However, inflation in advanced economies seems unmovable. There is a great schism in the inflationary outlook in advanced economies and ASIA. Central Banks’ hands are tied, and this chart from Ian Harnett elegantly visualizes the problem.<\/p>\n

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In the past, every time systemically essential banks (green) experienced a 20%+ equity drawdown, central banks (orange) had to step in, but they cannot and will not this time!<\/p>\n

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According to the latest report from BlackRock:<\/p>\n

The Great Moderation, the four-decade period of steady growth and inflation, is over<\/li>\n
Contracting activity and energy shocks signal recessions<\/li>\n
Inflation in developed economies is high and persistent<\/li>\n
Central banks are hiking into recession<\/li>\n
A deep recession is needed to pull inflation down to targets<\/li>\n<\/ul>\n
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INTEREST RATES OUTLOOK FROM 1988-2022 IN THE USA<\/strong><\/h2>\n
As U.S. inflation remains at multi-decade highs, the Federal Reserve has been aggressive with its interest rate hikes. Rates have risen more than two percentage points in just six months.<\/p>\n
In this graphic inspired by a chart from Chartr, we compare the speed and severity of the current interest rate hikes to other periods of monetary tightening over the past 35 years.<\/p>\n
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The 2022 rate hike cycle is the fastest, reaching a 2.36 percentage point increase nearly twice as fast as the rate hike cycle of 88-89.<\/p>\n
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ENERGY MARKET OUTLOOK UPSURGE ON THE CARDS<\/strong><\/h2>\n
The #energy crisis could get worse. So could the #costofliving crisis. OPEC+ has decided to cut two million barrels per day when there are just 24 days left of oil reserves in the U.S. Look at the chart below!<\/p>\n
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Here are some quick thoughts:<\/strong><\/p>\n
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The oil market will remain in a backward phase, i.e. spot will be higher than in the future.<\/li>\n
Saudi Arabia and Russia are calling shots in the energy market. We have been sharing since 2020.<\/li>\n
Oil prices meander around $110 to $150\/barrel.
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$\"shan$ The article is written Shan Saeed, Chief Economist at Juwai IQI.<\/em><\/span><\/strong><\/p>\n
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