Generalized Slowdown

By Isaac Cohen*

Understood correctly, interest rate cuts indicate the economy is slowing down, but if 30 central banks decide to lower interest rates then there is a generalized slowdown. As described in The New York Tines (08/17/19) throughout this year, more than 30 central banks have lowered interest rates, mainly because of concerns about a slowdown in global growth. This has been the case of the central banks of Brazil, India, Korea, New Zealand, Mexico, Thailand and now, for the second time this year, the US central bank.

. The statement issued after the last meeting of the Federal Reserve Open Market Committee last meeting, on August 18, recognized that sustained but moderate expansion of economic activity, strong labor market conditions, and inflation near the 2 percent objective can be expected to continue, “but uncertainties about this outlook remain.”

Meanwhile in Basel, Switzerland, the Bank for International Settlements, the bank of the central banks, on September 22 said: “The rally in equity and credit markets seen in early 2019 reversed course in May on the prospect of higher tariffs on US-China trade and US imports from Mexico. Facing weakening growth and subdued inflation, central banks in advanced economies (AEs) as well as emerging market economies (EMEs) eased policy to pre-empt a further deterioration.”

*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.

About Ramón Jiménez

Ramón Jiménez, Managing Editor de MetroLatinoUSA.Com (MLN). Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia (UDC). Email: [email protected]

You must be logged in to post a comment Login