As inflation has fallen around the world, Bofa strategists estimate that 152 central banks around the world will cut interest rates in 2024, the highest since 2009.
This has attracted widespread attention and has also triggered in-depth thinking about the future trend of the global economy.
Central bank interest rate cuts have become a major global trend.
Faced with declining inflation and uncertainty about economic growth, central banks around the world have adopted loose monetary policies to stimulate economic growth. According to Bofa strategists, 152 central banks will cut interest rates in 2024, which is a huge number and indicates the general acceptance of loose monetary policy by central banks around the world. Behind this trend is concerns about the economic outlook, with central banks trying to maintain financial stability and promote economic recovery through interest rate tools.
Growth rates in major economies are expected to moderate in 2024 compared to 2023.
This expectation comes from the view of Porter, chief economist of BMO Capital Markets. However, he also noted that three major forces will help avoid a global recession. The first is the central bank's interest rate cut, which has become a global monetary policy trend. The second is the cooling of energy and food prices, which is essential for the control of inflation. Finally, the gradual return of the ** chain to the normal track, which helps to relieve the pressure on the production and delivery links. These three forces interact to form a comprehensive dynamic against the global economic recession.
The trend of central banks cutting interest rates could have far-reaching implications for the global economy.
The first is that loose monetary policy is expected to stimulate investment and consumption, and promote the recovery of the real economy. This may also lead to some negative effects, such as poverty alleviation and asset bubbles. In addition, the impact of the central bank's interest rate cut on the financial market is also worth paying close attention to. A low interest rate environment may cause investors to seek high-yield assets, triggering market volatility. In addition, the adjustment of monetary policy may have an impact on the exchange rate, which in turn will affect the international **. As a result, central banks need to find a balance between maintaining financial stability and boosting economic growth.
For the cooling of the rise in energy and food**, which has a positive effect on alleviating inflationary pressure. However, energy and food markets are highly volatile and are affected by a variety of factors, including supply and demand, geopolitical factors, etc. In this regard, global cooperation and market regulation are particularly important to ensure the stable functioning of energy and food markets and create a more favorable environment for the global economy.
*The gradual return to normalcy of the chain is also a key factor in the global economic recovery.
During the epidemic, the global ** chain faced serious bottlenecks and interruptions, resulting in a series of production and delivery problems. If the first chain can gradually resume normal operation, it will help reduce production costs, improve efficiency, and promote the coordinated development of the global industrial chain.
The recovery of the chain requires not only international cooperation, but also the strengthening of domestic industry coordination among countries to ensure the sustainable and stable operation of the chain.
In general, the central bank's interest rate cuts, the cooling of energy and food prices, and the gradual return of the chain to the normal track have jointly promoted the development of the global economy.
Of course, it is also necessary to be vigilant against potential risks and challenges.
A central bank interest rate cut may lead to some negative effects, such as poverty alleviation, asset bubbles, etc. Volatility in energy and food markets persists, and there is a need for greater international cooperation and market regulation. **The recovery of the chain requires greater coordination among countries to deal with uncertainties and risks.
In the future of economic development, countries around the world need to work together to maintain support for multilateralism and move the global economy towards a more robust and sustainable track.