Two of the biggest economies in the world just reported negative GDP growth. The UK is on a technical recession after a -0.3% 4Q23 gdp growth following a negative 3Q as well and Japan has also fallen into recession after reporting a -0.4% on 4Q23 gdp growth. Europe has lowered the expected growth for the EU on 2024 from 1.2% to 0.8%. Both recessions and expected growth rates as shallow, and the difference between both can be minimal, but it’s very difficult to see a continuation of a bull market when economies don’t grow. And then the question becomes: can central banks lower rates to reactivate economic growth when their mandates are price stability and full employment? What happens during the period of low to negative growth and stubborn above-2% inflation?
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