The Wall Street JournalThe Wall Street Journal

The global economy looks like it’s out of sync

By James Mackintosh

16 Jun 2023 · 3 min read

informed Summary

  1. Central banks of the world's three biggest economic blocs have come to different conclusions, with the eurozone raising rates, the U.S. on hold, and China cutting rates.

In just 24 hours this past week the central banks of the world’s three biggest economic blocs came to starkly different conclusions, with the eurozone raising rates, the U.S. on hold and the Chinese cutting. It’s getting harder for investors to understand the global economy—and potentially getting harder for the Federal Reserve to put a lid on inflation.

The conflicting moves are caused by economies increasingly moving to local rhythms. Europe is in a technical recession, but the central bank expects inflation to last. China has no inflation problem but is suffering from the aftermath of its extended lockdowns and property bubble. The U.S. economy is doing surprisingly well, and inflation has plunged, but underlying price increases remain stubbornly high.

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