The Economy Is Humming. Bankers Are Cheering. What Could Go Wrong?
- 7 years ago
The Economy Is Humming. Bankers Are Cheering. What Could Go Wrong?
Mr. El-Erian, for example, said he was nervous about several possibilities:
that global growth could taper off; that prices of stocks, bonds and other financial assets are unsustainably high; and, most important, that markets might not be prepared when central banks reverse their efforts to stimulate economies by keeping interest rates low and buying huge sums of assets.
Susan Lund, an expert on global financial trends at the McKinsey Global Institute, said these types of investments from global asset managers tended to be longer term — and thus less destabilizing — than the so-called hot money from commercial banks
that contributed to recent debt crises in the United States and Europe
“The meetings will celebrate this period of synchronized economic growth
and calm financial markets,” said Mohamed A. El-Erian, chief economic adviser to the fund giant Allianz.
“It is the strongest growth we have seen since 2010.”
In Japan, a reform-minded government and aggressive action by the central bank
have pushed growth to 1.5 percent — up from 0.3 percent three years ago.
A big driver for growth in emerging markets, said Mr. Coulton, the economist at
Fitch, has been Chinese imports, which are up more than 10 percent this year.
From Wall Street to Washington, economists have been upgrading their forecasts for the global economy this year,
with the consensus now pointing to an expansion of more than 3 percent — up noticeably from 2.6 percent in 2016.
Mr. El-Erian, for example, said he was nervous about several possibilities:
that global growth could taper off; that prices of stocks, bonds and other financial assets are unsustainably high; and, most important, that markets might not be prepared when central banks reverse their efforts to stimulate economies by keeping interest rates low and buying huge sums of assets.
Susan Lund, an expert on global financial trends at the McKinsey Global Institute, said these types of investments from global asset managers tended to be longer term — and thus less destabilizing — than the so-called hot money from commercial banks
that contributed to recent debt crises in the United States and Europe
“The meetings will celebrate this period of synchronized economic growth
and calm financial markets,” said Mohamed A. El-Erian, chief economic adviser to the fund giant Allianz.
“It is the strongest growth we have seen since 2010.”
In Japan, a reform-minded government and aggressive action by the central bank
have pushed growth to 1.5 percent — up from 0.3 percent three years ago.
A big driver for growth in emerging markets, said Mr. Coulton, the economist at
Fitch, has been Chinese imports, which are up more than 10 percent this year.
From Wall Street to Washington, economists have been upgrading their forecasts for the global economy this year,
with the consensus now pointing to an expansion of more than 3 percent — up noticeably from 2.6 percent in 2016.