How Bad is the Global Slowdown? Examining the Three Main Economies — MM #187

Everybody is talking about the global slowdown. Central banks all over the world have responded, but also governments need to do something. Are they doing enough?

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  1. US:  The world’s No. 1 central bank made an abrupt U-turn by removing rate hikes off the agenda and announcing an early end to the balance sheet reduction program. The government is already on a spending spree.
  2. China: The world’s No. 2 economy unleashed credit by loosening monetary policy and government spending is also stimulating the economy. This came in the face of the trade war with the US which is now waning.
  3. Europe: The old continent is the sick man of the world. The ECB does not have a lot of ammunition and a lot depends on Draghi’s successor. Italy is in recession and Germany isn’t doing much better, but both countries are not doing enough to stimulate the economy.

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