The latest escalation in the US-China trade war has reverberated through financial markets. The policy response will be important – we now expect two further 25bp cuts in the fed funds rate this year. China is also likely to use policy measures to offset any tariff impact, including allowing further depreciation of its currency.
The latest escalation in the US-China trade war – with the US imposing a 10% tariff on most remaining China imports – has reverberated through financial markets.
Below-trend growth and low inflation – another rate cut ahead.
We’re seeing below average confidence and conditions. The picture remains unchanged since last month – business sector has lost significant momentum since early 2018 and forward looking indicators don’t point to an improvement in the near term.