Dovish world

Central banks around the world are cutting rates. The last two have been the Bank of England and the Bank of México. Only Brazil, Japan and Taiwan are still hiking. The rest of the major central banks are injecting liquidity in the system. And the reason is they believe inflation is under control. But is it? The Trump administration says that tariffs will be paid by exporters into the U.S., but if that were the case, why would their central banks be cutting rates? Wouldn’t it be prudent to wait until having more factual information on the actual costs of trade under the new paradigm of tariffs? Are central banks cutting because growth is anemic and the need to facilitate productivity in their respective economies? Perhaps we reaching the end game where we have different levels of stagflation in developed economies, and the developing ones, typically associated with commodities, are coming back with the help of rising prices and low levels of debt. If the Fed end up cutting rates, which is an accident waiting to happen, the dollar should weaken, and that will as more tailwinds to Emerging markets.

Want to know more? You can find all our posts at https://www.myfundamental.net/insights

#iamfundamental #soyfundamental #wealthmanagement #familyoffice #financialadvisor #financialplanning #policymistake #ratecut #stagflation