60 seconds with Keith Wade on the Goldilocks economy
In this video Keith Wade explains why the global economy is currently in a Goldilocks scenario.
13 October 2017
The global economic outlook is for what’s called a "Goldilocks” economy at the moment. This is because economic growth is not too hot and not too cold.
The good news is that global economic growth is doing quite well, we’re enjoying a synchronised recovery. We’re seeing growth pick up, particularly outside the US. So, emerging markets are doing better, Japan’s doing better and the eurozone is doing very well at the moment. The UK has not really shared in that as much as we think the uncertainty of Brexit is weighing on decisions about spending and that’s holding things back somewhat.
The other side of the goldilocks economy, of course, is that inflation is well-contained, particularly in the US where inflation has tended to surprise on the downside. That’s important for markets because it means that interest rates won’t have to rise as much as perhaps people thought earlier in the year.
So, combining that outlook with the goldilocks economy, and with the fall of political risks, it means that the environment for risk assets is pretty good.
Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results. The value of an investment can go down as well as up and is not guaranteed. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Schroders has to its customers under any regulatory system. Regions/ sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. The opinions in this material include some forecasted views. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee than any forecasts or opinions will be realised. These views and opinions may change. To the extent that you are in North America, this content is issued by Schroder Investment Management North America Inc., an indirect wholly owned subsidiary of Schroders plc and SEC registered adviser providing asset management products and services to clients in the US and Canada. For all other users, this content is issued by Schroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. Registered No. 1893220 England. Authorised and regulated by the Financial Conduct Authority.