Wellington Management's Natasha Brook-Walters: Divergence is not just about central bank policy

Interest rates

clock • 3 min read

When America sneezes, the rest of the world catches a cold. But in a more divergent world, does the saying still hold true?

Since the late 1990s, when the US cycle turned, the rest of the world generally followed, with a lag. As a result, central banks have tended to follow the Fed's lead. However, the new economic era — with its greater volatility, higher inflation, and shorter and more frequent cycles — is likely to result in greater cyclical divergence between countries and the need for different central bank responses. How is potential central bank monetary policy divergence affecting asset allocation? We are already seeing this play out — most notably between the US Federal Reserve and European Cen...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Economics

Fund managers most bullish since 2021 as inflation fears recede

Fund managers most bullish since 2021 as inflation fears recede

Growing confidence in US economy

clock 19 June 2024 • 1 min read
UK inflation returns to 2% target but June BoE cut remains unlikely

UK inflation returns to 2% target but June BoE cut remains unlikely

First time since 2021

Cristian Angeloni
clock 19 June 2024 • 2 min read
UK investment levels remain lowest in G7 for third year in a row

UK investment levels remain lowest in G7 for third year in a row

£1.9trn underinvestment in last 32 years

clock 18 June 2024 • 2 min read
Trustpilot