Global Data Pod

Bruce Kasman is joined by Jay Barry, Joe Lupton, and Michael Hanson to discuss today’s FOMC meeting and the path of policy normalization across the Developed Market economies. As expected, the FOMC laid the ground work for an expected March hike and mid-year start to QT. While Chair Powell also met our expectations in eschewing the gradual adjustment guidance delivered on the eve of the 2004 and 2015 normalizations he went further by emphasizing differences that “are likely to have important implications for the appropriate pace of policy adjustments.” His hawkish comments raise the risk of a more aggressive pace of tightening and add upside risk to the interest rate outlook. We remain comfortable that the economy will prove resilient in the face of this adjustment and will rebound from an expected large Omicron drag at the start of the year.  Other DM central banks are also in motion, but at a more gradual pace on both balance sheet and rates. Importantly, this cycle should also prove different as the ECB is expected to be raising rates within a year of the start of Fed normalization.

This podcast was recorded on January 26 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-3983276-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.

Featured in this podcast is Bruce Kasman and Joseph Lupton. The global economy looks to have bounced back strongly last quarter as bottleneck pressures eased and pandemic headwinds faded. But a new round of the same pressures are set to damp growth this quarter. The consumer will bear the brunt. Inflation is a key concern, as rising energy and core prices are joined by surging agriculture prices. Central banks to look through the near-term headwinds and move toward normalization. The Fed next week is widely expected to deliver guidance to March lift-off.

This podcast was recorded on January 21, 2022.

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.

Featured in this podcast are Malcolm Barr, Raphael Brun-Aguerre and Greg Fuzesi.

We discuss recent changes to our forecasts for inflation (higher) and the ECB (earlier tightening).

This podcast was recorded on January 21, 2022.

This communication is provided for information purposes only.  Institutional clients can view the related report at www.jpmm.com/research/content/GPS-3972532-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

Featured in this podcast are Ben Ramsey, Cassiana Fernandez, Gabriel Lozano, and Diego Pereira. In this podcast we review our economic outlook for Latin America in 2022, a year in which we see many challenges amid prospects for high inflation, tightening monetary policy, slowing growth, and significant political and electoral uncertainty.  In particular, we focus on the main questions we’ve been getting during our conversations with investors as we kick off the new year.

This podcast was recorded on January 20, 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-3968916-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.

Featured in this podcast is Hiroshi Ugai and Ayako Fujita. Since Japanese firms’ wages have barely increased for 20 years, currently the Japanese government is planning to introduce many measures like a tax incentive, moral suasion, and selective wage increases to accelerate Japanese firms’ wage growth. The government expects that these measures will lay the foundation for future economic growth, and that a large rise in wages would also contribute to a sustainable rise in prices. We discuss the impact of these measures, and find that these measures are unlikely to work under the current high labor income shares and firms’ still cautious price-setting behavior in the face of the huge increases in energy and commodity prices. We think persistent labor shortages or policies to boost labor productivity such as through promoting digital transformation (DX) would have more impact, though it would take time to reap results.

This podcast was recorded on Jan 20, 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at https://jpmorganmarkets.com/research/content/GPS-3966542-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

Momentum continues to soften as consumers took a breather through the holidays. Downgrades this week point to 1Q21 being the weakest of the expansion. We see the Omicron wave as a concentrated drag that will reverse in later quarters. But elevated inflation and a faster-than-expected normalization in labor markets is challenging the view of a gradual path of monetary normalization around the world, and this should temper the expansion. 

Featured in this podcast is Bruce Kasman and Joseph Lupton.

This podcast was recorded on January 14, 2022.

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.

Bruce Kasman is joined by Joe Lupton to discuss recently published research showing that factory output is rebounding and sending encouraging signs that the bottlenecks holding back activity are easing. Evidence is emerging from the global PMIs and a range of transportation price measures. Even more encouraging is the robust recovery gathering steam in Asia, a goods-centric region at the center of the supply chain bottlenecks, and the motor vehicles sector where global output fell 25% over the first nine month of 2021. While final demand is growing at a modest pace, the strong desire to replenish depleted inventories has pushed global factory output gains to a double-digit annualized pace in the last three months of 2021.

The evolving spread of the Omicron variant looks likely to slow this recovery and generate a significant, synchronized drag on global growth this quarter. Our view is that services will bear the brunt of the near-term drag and that it is unlikely that there will be a significant renewal of manufacturing sector supply constraints. If right, manufacturing will take the lead in global growth this quarter as inventory replenishment continues.

 

This podcast was recorded on January 12, 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-3968 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

Marco Protopapa and Malcolm Barr discuss the economic and political outlook for Italy in the light of the forthcoming choice of a new president.

This podcast was recorded on January 11, 2022.

This communication is provided for information purposes only.  Institutional clients can view the related report at www.jpmm.com/research/content/GPS-3965695-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

The global recovery is experiencing a fading of the supply shocks that damped growth last year but now facing a new resiliency test in the form of Omicron. We expect industry to weather the storm better than services, a view supported so far by the December PMIs, and for the economy as a whole to fare better than prior COVID waves. Central banks are keeping their eyes on normalization, and we now see the Fed hiking in March and beginning balance sheet roll-off in July.

 

Speakers:

Bruce Kasman

Joseph Lupton

This  was recorded on January 7, 2022.

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.

Bruce Kasman is joined by Raphael Brun-Aguerre, Joe Lupton, and Nora Szentivanyi to discuss the near-term inflation outlook. Global CPI inflation accelerated sharply last quarter to an estimated 5.9%ar, approaching its fastest pace over the past quarter century. This acceleration was accompanied by a notable broadening of price pressures. While a broadening of price pressures often signals a sustained upward shift in inflation but we believe it is appropriate to fade last quarter’s acceleration and look for a significant drop to a 3.5%ar in 1Q22. 

 

It is easy to forecast a deceleration in energy inflation as a natural gas price shock is starting to fade. Forecasting the trajectory of core inflation is more complicated as goods and services prices face different COVID -related cross-currents. In all, we forecast core inflation to stabilize this quarter. But for the first time in a year, we assess risks at the start of the quarter as skewed towards a downside surprise. In contrast to last year’s COVID waves, it is unlikely that the Omicron wave derails the gradual relaxation of global supply constraints now underway. Its potential drag on service-sector demand thus poses the greatest near-term risk.  

This podcast was recorded on January 5, 2021.

This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-3961435-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.