June 14, 2023
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Recession postponed, not canceled
Despite the aggressive monetary policy tightening we’ve seen so far, economic activity in developed economies has shown to be more resilient than expected amid a strong rebound in the services sector.
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Inflation remains stickier than expected
While headline inflation is easing, core inflation remains stubbornly high, and it isn’t just due to services inflation: Goods inflation is inflecting higher after a period of decline.
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Unexpectedly hawkish central banks
From the Bank of Canada to the Reserve Bank of Australia to Bank Negara Malaysia to the U.S. Federal Reserve, central banks around the world are proving to be more hawkish than expected.
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A shifting geopolitical backdrop
There are signs that we’re entering a new global regime, requiring a rethink of how risk assets respond to changes in the macro backdrop.
U.S. recession appears likely despite unexpected strength
Data year to date suggests that the U.S. economy had a better start to the year than expected. But we see this as a case of recession postponed rather than canceled.
Download our Q3 Global Macro OutlookThree factors underpinning economic activity in the United States
The Chicago Fed's National Financial Conditions Index
Source: Federal Reserve Bank of Chicago (Chicago Fed), Macrobond, Manulife Investment Management, as of June 16, 2023. It is not possible to invest directly in an index.
U.S. consumer spending financed by pandemic-related accumulated savings
Source: Federal Reserve Bank of San Francisco, Macrobond, Manulife Investment Management, as of June 16, 2023. Currency is shown in U.S. dollars.
U.S. consumer spending on services has outpaced spending on goods in the past year (%)
Source: U.S. Bureau of Economic Analysis, Macrobond, Manulife Investment Management, as of June 16, 2023. PCE refers to personal consumption expenditure.
“In our view, these tailwinds should dissipate as the lagged effects of monetary tightening filter through and the savings buffer that consumers have accumulated is run down.”
—Sue Trinh, Co-Head, Global Macro Strategy, Manulife Investment Management
Three-minute macro
Data, data, everywhere
Three charts. Three minutes. Lots of insight.
Q2 Global Macro Outlook
Navigating turbulence
We examine if ongoing concerns about the banking sector might affect the global growth picture and if it's premature to be thinking about interest-rate cuts.
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Find out more about Frances and her views
Frances Donald
Global Chief Economist and Strategist
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Find out more about Sue and her views
Sue Trinh
Co-Head, Global Macro Strategy
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Find out more about Alex and his views
Alex Grassino
Co-Head, Global Macro Strategy
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Find out more about Dominique and his views
Dominique Lapointe
Global Macro Strategist
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Find out more about Erica and her views
Erica Camilleri
Senior Global Macro Analyst
Additional viewpoints
June 7, 2023
The Bank of Canada “unpauses”—what’s next?
May 31, 2023
Will U.S. banking woes accelerate the shift to a fragmented global economy?
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