At the annual Jackson Hole conference, global policymakers highlighted the shifting focus of central banks from high inflation to weakening job markets.
While U.S. and European central banks consider interest rate cuts, the Bank of Japan is sticking to its policy of reducing monetary support due to sustained price growth.
This divergence, combined with ongoing economic struggles in China, suggests a turbulent period ahead for global markets.
The recent U.S. jobs data and the Bank of Japan’s unexpected rate hike have heightened recession fears, leading to market volatility.
Despite optimistic projections for modest global growth, uncertainties remain.
Analysts caution that recent shifts in central bank policies, particularly towards rate cuts, could lead to further market fluctuations.
China’s economic troubles, including deflation and a property crisis, further complicate the global outlook.
With weak growth impacting global demand, especially for manufacturers, the interconnectedness of economies means that China’s slowdown may have widespread effects, including potential relief from inflation for some emerging economies.
(Reuters)