Global Central Banks React to Slowed Economic Momentum

April 18, 2019 | David Hernandez, CFA, Senior Research Analyst, Non-U.S. Equities

In 2017 the global economy underwent a synchronized move upward and investors saw equities throughout the world generate double-digit returns. That momentum was lost in 2018 and most economic data points missed analysts’ expectations leading to downward revisions in GDP growth. As a result, several major central banks have taken steps to become more accommodative to help navigate the slowdown.

In the U.S., the Fed has put future rate hikes on pause and has communicated it will be patient on future adjustments. Based on Fed Funds futures, the market expects an eventual rate cut. In Europe, the ECB extended its no rate hike stance through the end of 2019. Additionally, the central bank announced its third targeted long-term refinancing operation aimed at avoiding a credit squeeze that could exacerbate the economic slowdown. In China, authorities organized a stimulus package including $298B in tax cuts to help boost domestic demand. Additionally, the country has reduced the bank reserve ratio from 17% at the start of 2018 to 13.5% as of 1Q19. Though still early, there has not been a marked improvement in global economic activity. However, markets have welcomed the more accommodative stances from these three key central banks and equity markets have rebounded from the tough 4Q 2018.

Print PDF > Global Central Banks React to Slowed Economic Momentum

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

David Hernandez, CFA
Senior Research Analyst, Non-U.S. Equities

Get to Know David

Related Content


Is Growth Conceding?

The market’s continued rally following the U.S. election has been a welcome relief, even more so for value investors. Since…


Why Will Yields Remain Low After COVID and What Can Investors Do About It?

As we head into the 2020 year-end holiday season on the heels of positive vaccine news and an all but…


Defined Contribution Plan Legislative Update – 4Q 2020

While legislators have been focused on negotiating the next round of stimulus and dealing with the implications of the recent…


The Dollar Returns to Trend (and Could Go Lower)

The dollar has enjoyed an impressive run during the last few years on the backs of trade restrictions, off-cycle expansionary…


Welcome to Lockdown 2.0

As the market and world-at-large were elated by Pfizer’s announcement of positive trial results for its COVID-19 vaccine this week,…


What Does the Biden Win Mean for Financial Markets?

On Saturday, November 7th, Joe Biden was declared the winner of the presidential election and will become the 46th president…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >