Global Macro Outlook - Fourth Quarter 2023

What You Need To Know

The global economy remained resilient last quarter, although some regions now feel the pinch of aggressive central bank policies. Inflation is down but a return to normal could take time. We expect a manageable economic slowdown with a gradual inflation dip, but some risks will hover.

• Years of aggressive monetary conditions have begun to bite, and global central banks appear near the end of their respective tightening cycles.
• Growth in Europe was weaker than the US, since households there had comparatively smaller savings to navigate high inflation.  
• Emerging markets have been relatively resilient, with record-level remittances a contributing factor.  
• China’s growth continues to disappoint, primarily due to a longer-term secular slowdown, and we expect further policy easing as a result.
• We now believe the Fed, as well as the Bank of England and European Central Bank, will hold rates for several quarters before undertaking a gradual easing cycle.
• Investors should be optimistic, but watchful of events that could change the picture in the coming quarters.