The economy is in big trouble, and the world’s central banks may be running out of ways of turning it around, according to Carl Weinberg, chief economist at High Frequency Economics.
“The state of the global economy stinks,” Weinberg said in a research note on Wednesday. “Like it or not, growth is slowing or worse in all major economies”
The major worry for Weinberg is that the world’s central banks have been working hard to avert a monetary contraction but have so far failed to do so despite huge and often unconventional measures.
“Now that we are back to looking at economies, we do not like what we are seeing in the monetary conditions. The (European Central Bank's) tightening of monetary conditions flabbergasts us, and we hope we have seen the end of it,” said Weinberg.
“These are treacherous economic times, and no one wants to cause a global depression by tightening monetary conditions when they are already tight by all metrics other than interest rate levels," he said.
With fiscal policy across the world also tightening, Weinberg is bearish on the prospects for growth.
“We are grim in our expectations for global economic growth in the second half of the year and beyond” he said