Trend Watch: Global Monetary Policy Convergence
Callum Thomas | Sep 19, 2017 06:08AM ET
The big focus this week is on growth in emerging market economies .
At the same time the monetary tides are turning in developed economies: monetary policy normalization is now well underway in America, Canada is now also hiking rates, and the ECB has probably reached a turning point in its easing program.
The result is convergence in global monetary policy rates, and on balance actually a lower global GDP weighted policy rate as the easing in emerging markets offsets the tightening in developed economies. At a global level this should mean a net-positive impulse to growth but it also may create some divergences in economic performance and is sure to result in more differentiated opportunities across global markets. So this is likely to be a key theme for investors.
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