Does détente mean the greenback has already peaked?
Joachim Fels, global economic advisor, offers a closer look at the factors driving PIMCO’s forecast for global GDP growth (2.5%–3.0%) and inflation (2.0%–2.5%) in 2017.
PIMCO recently published its Cyclical Outlook for global growth, inflation, trends and transitions likely to affect the investment landscape in 2017. Here are some key takeaways.
With Donald Trump’s election as U.S. president, we have entered a new phase that I call a “cold currency war.”
Each of the six Republican presidents since the Second World War presided over a recession, and some more than one.
A more differentiated view of the potential long-term economic and policy consequences of President-elect Trump must take on board both the considerable uncertainties still surrounding the next U.S. administration’s economic policies and the global links between economies and markets.
We do not expect the dollar’s rally to gain much steam from here.
Heightened worries about politics, populism and protectionism, together with diminished fears of deflation and recession, will likely lead to a very different policy mix in the advanced economies: less monetary, more fiscal.
The summer sedation in markets caused by dovish central bank talk and action after the Brexit vote lies behind us.
Emerging markets have been quietly undergoing positive, fundamental change that we think will likely increase value in the asset class.