Central bankers across the world are set to fill up the proverbial punch bowl, but it may not juice stock markets much.
That’s according to a new strategy note from Deutsche Bank, which outlined what it expects major central banks around the world to do in the coming months.
|Central bank||Expected action|
|U.S. Federal Reserve||Three cuts in 2019|
|European Central Bank||10-basis-point cut in September and December, maybe more QE and “tiering” in September|
|Bank of Japan||On hold with no changes in target yields possibly into 2020|
|Bank of England||No hikes until August 2020|
|People’s Bank of China||To cut open market operations rate by 10 to 50 basis points, and one reserve requirement ratio cut|
|Emerging markets||Cuts coming in Russia, South Africa, Turkey, India, Indonesia, Philippines, Vietnam, Brazil and Chile|
That should help limit slowing growth momentum, and Deutsche Bank sees world growth of around 3.2% this year. The monetary-policy actions, the Deutsche Bank strategists say, should allow for “cautious” near-term growth, as the central-bank easing counteracts political and trade headwinds.
Equity markets already are pricing in a strong rebound in growth, limiting the potential for...