Dangers lurk for the Goldilocks economy

Growth should recover modestly, resulting in a “Goldilocks” global economy that is neither recessionary nor too expansionary, says Nikolaj Schmidt, Chief International Economist in the Fixed Income Division of T. Rowe Price. Meanwhile, slowing inflation, combined with the current high level of interest rates, should give the U.S. Federal Reserve plenty of scope to cut rates this year. However, risks to this benign outlook include the U.S. presidential election, the war in Ukraine, and continuing tensions in the Middle East and South China Sea.