CIO Insights: Cracked, But Still Intact


If central banks do not cut rates, their authority could start to be undermined because they have raised expectations about lower rates to the point where it would be awkward to backtrack. This may provide an incentive to cut rates—good news for markets in the short term, but not necessarily in the long term.There is also a non-optimal solution in that central bank action is partly being used to counter the effects of an esclation in the trade dispute. This situation has a direct bearing on the six investment themes for 2019 and the macroeconomic forecasts for 2020.

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