Consensus Believes Inflation is Dead. What Can Go Wrong?
What might generate an inflation surprise in 2024/25?
You cannot reverse half a century of neoliberalism with a one-off fiscal stimulus
-Dario Perkins
It seems everyone now has the exact same outlook: inflation gradually converges on central banks’ 2% targets during the course of 2024 (but never quite gets there) before edging a little higher again in 2025 – presumably once the authorities have cut interest rates and the global economy has recovered from its current slump.
Nevertheless, there are currently more than 180 ongoing military conflicts in the world, the highest number for at least three decades. Whether this is the result of “Western weakness”, or symptomatic of the growing geostrategic rivalries, it is clear that geopolitical risks are a very real threat to financial markets and the global economy in 2024.
TS Lombard asks: What Can Go Wrong?