Global Data Pod

Nora Szentivanyi is joined by Michael Feroli to discuss the Fed’s response to the recent banking stress, historical parallels and the likely economic fallout. A rough estimate is that slower loan growth by mid-size banks could subtract 0.5-1% off the level of GDP in coming quarters. We believe this is broadly consistent with our outlook of a Fed-induced recession later this year. The Fed isn’t done, in our view, and we look for another 25bp hike this week, and a final hike in May.

 

 

This podcast was recorded on Mar. 21, 2023.
 
This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4361113-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved. 

Elevated financial market stress and uncertainty have arisen against a backdrop of sticky high inflation, still-tight labor markets, and recent upward revisions to growth in the US and China for this quarter. The ECB reacted to this quandary by hiking 50bp as previously signaled and maintaining a tightening bias, but removing any formal guidance and noting its available tools to address market dysfunction. We expect a broadly similar message from the Fed as it hikes 25bp next week.

Speakers:

Bruce Kasman

Michael Hanson

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

As we look to the coming spring, the data is anything but clear. This week’s news points to ongoing resilience while Chair Powell’s comments underscored that this may be too much of a good thing. Next week’s US CPI report looks to be hot yet again, moving the needle toward a 50bp Fed hike. The ECB is on deck for next week and has already pointed to 50bp. Also up next week will be the key China activity data for Jan-Feb.

Speakers:

Bruce Kasman

Joseph Lupton

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

The news on the week points to even greater resilience in the global expansion and more upside surprises on inflation. What’s a worried central bank to do? With a number of key data releases and central bank meetings coming up in March, the various scenarios of our outlook are considered: from soft-landings, to boiling frogs, to wrathful old testament central banks.

Speakers:

Bruce Kasman

Joseph Lupton

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

Nora Szentivanyi is joined by Jahangir Aziz to discuss China’s reopening and spillovers to the rest of EM. A consumption and services-led recovery in China points to a more muted spillover than typically implied by China’s headline growth. But if the rebound and reduced growth volatility spur a positive shift in business sentiment, the full impact can be larger than the sum of the parts.

Speakers:

Nora Szentivanyi, Economic Research

Jahangir Aziz, Emerging Markets Economic and Policy Research

This podcast was recorded on March 1, 2023.

This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4341171-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

In this week’s Research Rap of the Global Data Pod, Bruce Kasman is joined by Joe Lupton and Alex Wise to discuss our recent special report on public sector debt sustainability. After gradually rising 35%-pt in the 30yrs since the mid-1970s, government debt in the developed markets has jumped roughly 50%-points in just 15 years. A framework is considered for assessing debt sustainability, while thoughts are provided exploring the path ahead.

Speakers

Bruce Kasman, Economic and Policy Research

Joseph Lupton, Economic and Policy Research

Alex Wise, Long-term Strategy

This podcast was recorded on 27 February 2023.

This communication is provided for information purposes only. Institutional clients can view the related report https://www.jpmm.com/research/content/GPS-4340654-0.pdf  for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

 

 

Another week of data showing resilient growth—even strong in the case of the US—along with upside surprises in inflation add to the risks that the most rapid global hiking cycle in over forty years has longer to run. While we are willing to fade some of the signal in the punchy January data, the pressure is on for February data to show a return to the path of moderating growth and inflation in line with the goals of central banks to generate a soft-landing.

Speakers:

Bruce Kasman

Joseph Lupton

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

 

Nigeria faces a pivotal election this coming Saturday where voters will choose a new president. Nigeria is the largest economy in Africa with vast oil wealth, but years of mismanagement have worsened imbalances and it has failed to fully benefit from the commodity windfall. From multiple exchange rate regimes to Central Bank quasi-fiscal spending to ballooning fiscal expenditure to high inflation, the next president will have a full in-tray. But based on the polling there is a chance that this election represents a break from the past.

In this edition of the Global Data Pod, Katie Marney is joined by Gbolahan Taiwo to discuss Nigeria’s election, what the polls say, the tall task ahead, and policy priorities for the next president.

Speakers:

Katherine Marney, Emerging Markets Economic and Policy Research

Gbolahan Taiwo, Emerging Markets Economic and Policy Research

This podcast was recorded on February 22, 2023.

This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4337030-0, www.jpmm.com/research/content/GPS-4309655-0, www.jpmm.com/research/content/GPS-4263687-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

Nora Szentivanyi is joined by Bruce Kasman to discuss why the widely held that monetary policy is already restrictive may be wrong. Central banks have been downshifting the pace of rate hikes based on the view neutral real rates remains close to zero in developed markets. But dramatic changes to the cyclical backdrop following the pandemic shock, along with the erosion of policy credibility and higher risk premia in several EMs, point towards higher neutral policy rates. Absent a recession taking hold this year, we expect views about the appropriate level of policy rates to shift higher. But if the dramatic rate hikes (400bp in DM and nearly 500bp in EM) generate a recession then the neutral rate rise will be obscured for some time.

The path to the next recession is hard to tie down, but risks are skewed in the direction of this dynamic taking longer and requiring higher rates than markets expect. Incoming data suggest that the path may not incorporate any meaningful pause but instead reflect a gradual but sustained adjustment to lean against still-elevated inflation risks. In this scenario, central banks may not be intending to create a downturn—but that risk will increase as they continue to tighten monetary policy rates above what is currently priced in markets.

Speakers:

Bruce Kasman, Managing Director, Chief Economist

Nora Szentivanyi, Economic Research

This podcast was recorded on February 21, 2023.

This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4334724-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

The latest data show a US (and global) economy that is not only proving more resilient than some had feared but also more inflationary. The odds have risen for an expansion that may be in need of central banks stepping on the breaks more than we had expected and even more than markets.

Speakers:

Bruce Kasman

Joseph Lupton

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.