Page 3 - July-August 2018 GSE Report Flip Book
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THE GSE REPORT JuAl.N-UAuRgY. 2018
The announcement that the U.S. had reached a new trade agreement with Mexico creates an opening for Canada to rejoin talks as well. The threat of a global trade war has hung over businesses and markets this year, but it has taken a much greater toll on markets in China. While many have pointed to Iran tensions, problems in Turkey and several Latin American situations for the extended rattling in many Asian currencies, it is in fact the ugly combination of slower China growth, the withdrawal of liquidity from key developed market central banks, and (to some extent) the previous bump in dollar oil prices that account for the pressure on the most vulnerable of these economies.
Fed officials seem to be signaling some five interest rate hikes over the next 15 months. And the steady reduction in the Fed’s still swollen balance sheet lingers as the central bank sells off assets acquired since the introduction of quantitative easing in 2009. Will tighter financial conditions and a strong US dollar come back to haunt growth prospects even in the U.S.?
Abraham Gulkowitz
The Punchline
August 30, 2018
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