Economic Indicators 

Policymakers wait nervously on growth data

Policymakers wait nervously on growth data

Central banks have taken a notably more dovish tone since the turn of the year but, as European Central Bank (ECB) President Mario Draghi’s measured presentation on 6 June showed, policymakers are walking a tightrope. On the one hand, it is necessary to reassure markets that the bazooka is primed to fire. On the other, there is a hesitation about going off half-cocked before stores of dry powder are replenished. Slow reversal of past rate cuts diminishes one tool and bloated balance sheets reduce scope for further quantitative easing (QE). Global growth figures are the key determinant for how long central bankers can hold off as well as being vital to justify the expanded valuation multiples for most quality equities.

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