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16 Oct 2014
What new risks does the market signal? - Goldman Sachs
FXStreet (Łódź) - Noah Weisberger, economist at Goldman Sachs suggests that recent sharp moves in asset markets imply that new risks have been emerging, such as a considerable growth slowdown in the US and other parts of the world as well as increasing disinflationary pressures.
Key quotes
"Economic reality appears to have changed less. Global growth has been slowing, but the move has been gradual and there is little sign that it is accelerating."
"US momentum has softened a little too, but we expect growth to remain solidly above trend."
"At the same time, the drop in oil prices is as much a reflection of supply as demand factors. For consumers in the largest economies, it should provide meaningful relief, offsetting the pressure from tighter financial conditions and weaker global demand."
"As a result, we think the market is likely overreacting to the growth news here."
"That is clearest with respect to the US outlook, but we think probably also true outside the US after the latest fears."
"On the inflation front, we are more sympathetic to the view that risks are lower than the market previously expected. But even here, the shift in pricing has been large."
Key quotes
"Economic reality appears to have changed less. Global growth has been slowing, but the move has been gradual and there is little sign that it is accelerating."
"US momentum has softened a little too, but we expect growth to remain solidly above trend."
"At the same time, the drop in oil prices is as much a reflection of supply as demand factors. For consumers in the largest economies, it should provide meaningful relief, offsetting the pressure from tighter financial conditions and weaker global demand."
"As a result, we think the market is likely overreacting to the growth news here."
"That is clearest with respect to the US outlook, but we think probably also true outside the US after the latest fears."
"On the inflation front, we are more sympathetic to the view that risks are lower than the market previously expected. But even here, the shift in pricing has been large."