The succession of two major crises (the Covid-19 pandemic and then Russia's war against Ukraine) could lead to major and lasting changes to the world order. In today’s Focus, we review 10 potential macroeconomic and financial trends which could shape the next decade.
Further price fluctuations loom amid Fed hikes, inflation, and post-pandemic shifts.
The distortions created by central banks make it dangerous to read too much into price signals
The disruption of global supply chains has been a wakeup call for the European Union. For years, the principle of an open and free Single Market has led to a massive transfer of industrial production and outsourcing mainly to Asia.
Since the mid-1980s, the macroeconomic volatility has declined to a postwar low. The Covid-19 crisis brought one of the largest economic shock in modern history and could mark the end of the Great Moderation i.e. a turning point with higher economic volatility and a shift to a higher inflation regime. Those factors are likely to lead to higher financial market volatility than in the previous two decades.