Just last month, the International Monetary Fund lowered its global growth forecast on Monday, pointing to ongoing trade wars dampening China’s economic outlook as well as rising interest rates in the United States.
“Higher trade uncertainty will further dampen investment and disrupt global supply chains,” said IMF chief economist Gita Gopinath.
The IMF trimmed its growth expectations to 3.5 percent from 3.7 percent. Global growth outlook for 2020 was also cut to 3.6 percent from 3.7 percent.
“After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising,” said IMF Managing Director Christine Lagarde who presented the latest forecasts during the World Economic Forum in Davos, Switzerland.
Additionally, the Federal Reserve released its minutes from its Jan. 29-30 policy meeting in which it voted unanimously to hold its policy rate in a range between 2.25 percent and 2.5 percent. “Patience” has been a constant buzzword in the Fed’s vocabulary as of late and in the minutes released, leaning towards a patient approach to interest rates was confirmed.
“Participants pointed to a variety of considerations that supported a patient approach to monetary policy at this juncture as an appropriate step in managing various risks and uncertainties in the outlook,” the meeting said.
In the following video, Kevin Giddis, president of fixed income capital markets at Raymond James, and Michael Tyler, chief investment officer at Eastern Bank Wealth Management, join “Squawk Box” to discuss the markets. The panel touches on how international trade deals such as Brexit and the U.S.-China negotiations may affect the markets. They also discuss how the markets might react to a Fed rate move.
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