Global Market Outlook 2019 - Rates and inflation
We believe that one of the most important issues for markets and the global economy in 2019 will be inflationary pressure and how central banks react to it.
Here, Peter Khan, Portfolio Manager of Fidelity Funds - Global Income Fund, and Anna Stupnytska, Global Economist, share their views around interest rates and inflation for the year ahead.
Despite some signs of ageing, US growth momentum is continuing, with robust employment conditions compelling the US Federal Reserve to push ahead with interest rate rises into next year.
Core inflation is likely to remain relatively well-anchored around its target, so central banks may not need to aggressively tighten financial conditions.
Outside of the US, a sudden stress in China’s financial system is an ongoing risk, while other triggers could be ongoing issues in Turkey and European systemic risk.
In Europe, we may also see the market shifting its expectations on what the European Central Bank’s reaction will be, which could generate some potentially disruptive moves in currencies and credit markets.