Global economic policy: get ready for an exciting start to autumn

Predicting further normalisation policies from the European Central Bank (ECB), Riskbank and the Fed, Robert Bergqvist, Chief Economist at SEB, the leading Nordic corporate bank, comments on global monetary policy for the upcoming autumn period:

“As the Trump drama continues to unfold, the implications for geopolitics and US fiscal policy is unclear. Turning our focus to the future of Europe and monetary policy, we’re coming closer to a ‘make-or-break’ situation for the EU and Brexit. After the German election on 24 September 2017, the (expected) new dynamic duo of Merkel and Macron will try to save the EU and the euro with more integration and a multi-speed solution ahead of the 2019 EU elections. Get ready for a bumpy ride.

“The global economy continues to strengthen with near-term prospects the most favourable they have been for some time. Despite the ‘lowflation’ environment, we expect the ECB, the Riksbank and the Fed to confirm further normalisation steps within the next couple of weeks. The world still needs expansionary monetary policy but it’s becoming increasingly difficult to find arguments for its more extreme expressions such as zero or negative interest rates and QE policies. And when the ECB moves, the Swedish krona will strengthen.”

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