Global Data Pod

Nora Szentivanyi is joined by Raphael Brun-Aguerre and Dan Silver to discuss the 1H23 global inflation outlook. We anticipate that the slump in manufacturing, fading commodity price shocks and easing supply bottlenecks will drop global goods inflation to 1%ar in 1H23. Regionally, we expect downward pressure to be concentrated in Europe where the benefits of the unwind in the natural gas price shock is substantial. Emerging markets should also see a large drop in goods inflation, helped by a rebound in EM currencies and lagged effects of supply chain normalization. While China’s re-opening is a key reflationary impulse, we do not expect it to disrupt the near-term global disinflation trend.

The drop in goods inflation bolsters the case for a central bank pause. In Emerging markets, central banks are already moving to the sidelines, and we see eight countries cutting policy rates this year. The bar for a pause is higher in DM and will also depend on labor market and wage developments; we see the Fed hiking through 1Q23 and the ECB into 2Q23..

Speakers:

Nora Szentivanyi, Economic and Policy ResearchRaphael Brun-Aguerre, Economic and Policy ResearchDaniel Silver, Economic Research

This podcast was recorded on January 24, 2023.

This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4311009-0, www.jpmm.com/research/content/GPS-4310687-0, www.jpmm.com/research/content/GPS-4302639-0, www.jpmm.com/research/content/GPS-4306146-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

Having trimmed near-term recession risks recently, this week delivered stronger than expected data from China and a reassessment upward of our European outlook. However, not all is up. Disappointing US retail sales and IP data raise some concerns, but we are inclined to fade this given still-solid fundamentals. Fed speak this week shows growing comfort with 25bp, while hawkish comments from the ECB suggests a longer road to terminal. The BoJ left YCC unchanged as we expected, but disappointed markets.

Speakers:

Joseph Lupton

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.

Michael Feroli, J.P. Morgan’s Chief U.S. Economist, is joined by Bob Cusack, Editor in Chief of The Hill, for a discussion on policy, politics and the U.S. economy. Among the topics discussed, the two explore what implications the new leadership in Congress could have for government spending, and also take an early look at the 2024 presidential election.

 

Speakers:

Michael Feroli

Bob Cusack

 

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.

After a week in which growth prospects for 1H23 improved, inflation prospects improved as well this week. The disinflation trends that began in early 4Q22 continued through yearend as supply conditions look to be moving into better alignment with demand—a key condition that central banks need to see. But the journey has further to run, and the improvements will only be enough to get policy rates to hold in the coming months—not to start cutting. China re-opening is a positive for growth but the inflation impulse to the rest of the world will be keenly watched.

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.

Since the last JPMTV in mid-December, the news has been mixed but on balance shaves the risks of a near-term global recession, and boosts slightly the odds of a soft-landing while leaving a two-thirds chance of a recession by late-23/early-24. China’s COVID-drag looks worse but also points to a sooner-rebound, while stronger US expenditure data point to a more robust 4Q22. We are not out of the woods as the manufacturing sector looks particularly fragile and the Fed remains geared to stamping out inflation risks.

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.

A busy week of central bank meetings largely delivered on expectations, with the Fed and ECB slowing the pace of hikes to 50bp but underscoring their hawkish forward guidance. With Fed/ECB projected inflation running well above our forecasts next year, one question will be how they will respond if inflation undershoots those hawkish views. A special guest, Chief China economist Haibin Zhu, joins the call to discuss the rapidly changing China outlook. This will be the last episode for the year. Happy holidays to all.

Speakers:

Bruce Kasman

Joseph Lupton

Haibin Zhu

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

China appears to be relaxing its zero-COVID policy which will eventually open the door for a substantial growth rebound. However, a starting point of low immunity and limited health care capacity points to a bumpy growth path in 2023. It’s impact on the global economy depends on two key linkages – the impact of stronger demand on commodity prices and the impact of rising COVID cases on supply.

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. © 2022 JPMorgan Chase & Co. All rights reserved.

The near-term is characterized by a number of cross-currents, including brewing concerns about China, but the balance remains one of resilience. This week’s November PMIs paint a grim picture for global industry but other data show upside risk to the current-quarter growth outlook in the US and Europe. Global inflation is past its peak but remains elevated. The growth/inflation message reinforces our call for further rate hikes followed by an extended hold, but the risks around this are debated.

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. © 2022 JPMorgan Chase & Co. All rights reserved.

We probe key issues raised in our recently published 2023 global economic outlook. In the face of near-term risks to China and Western Europe we continue to  see the global economy to move forward on the back of fading supply-shocks that lowers inflation and fading DM fiscal drags. This will not, however, likely deliver a soft-landing scenario and we discuss the alternative scenarios in which the US and global economy could slip into recession over 2022-23.

 

Speakers:

Bruce Kasman

Joseph Lupton

Greg Fuzesi

Jahangir Aziz

 

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

After a late start to the hiking cycle, central banks have put in place a policy path that is expected to generate a sharp slowing in global growth—and a US recession—that will contain inflation pressures. This will take several quarters however as consumers are getting a near-term boost from fading inflation. The benefits are not felt evenly, with the US tracking strong growth his quarter, Europe expected to slide into recession, and China’s homegrown headwinds holding growth to below potential.

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. © 2022 JPMorgan Chase & Co. All rights reserved.