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Global recession.

The global economy is approaching a recession as economists polled by Reuters once again cut growth forecasts for critical economies. At the same time, central banks keep raising interest rates to bring down persistently-high inflation. One bright spot is that most significant economies already in a recession or heading into one are starting with relatively low unemployment compared with previous downturns. Moreover, after being late to call the inflation problem, global central banks have spent most of this year frontloading rate hikes to catch up. As a result, most economists and significant banks believe there will be little work left to do next year.

Michael Every, a global strategist at Rabobank, said «risk of a global recession is what everyone's talking about and has become mainstream in forecasts. «I think that's pretty much a no-brainer when you look at the trend in all the key economies». Looking at the low jobless rate is problematic. Each said it is a lagging indicator, and «the longer it stays stronger, the more central banks will feel that they can continue to hike rates». Of the 22 central banks polled this time, only six were expected to hit their inflation targets by the end of next year.

In the meantime, global equity and bond markets are in disarray. In contrast, while the international inflation cycle is international, the US dollar is made worse by a sudden surge in energy prices after Russia invaded Ukraine on Feb.

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  1. Zoey27 October 2022 at 22:58

    It was clear to everyone and their dog that we are all heading for a recession. I don't know why some are still acting surprised about this. After the pandemic, then the Russian Ukrainian war and other conflicts, all signs pointed to this.

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  2. Alexis1 November 2022 at 08:37

    While the pandemic clearly turned the world upside down, it was the addition of the Russian invasion that made things as worse as they are now. We are all suffering (in some way) whether it's the price hike, lives lost, etc. And I don't see a peaceful end to this in the near future.

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