Navigating disinflation

The global economy looks set to slow in 2024, as fiscal policy starts to drag on growth and higher interest rates weigh on household and business activity. Recessions ought to be avoided as rising real incomes support household consumption, outweighing the impact of higher mortgage costs. With growth expected to be subdued, this decline in inflation, combined with signs of softer labour markets, should open the door for major central banks to start cutting interest rates. The ECB is likely to be the first to move, possibly as soon as April, with the Fed unlikely to be far behind. As for...