Global Policy Rate Descent to Be Much Slower Than Ascent: Gruenwald

In the midst of the European Central Bank’s annual conference in Sintra, Portugal, I kicked off my interview with Paul Gruenwald of S&P Global ratings talking about what key central bankers like Christine Lagarde and Fed Chair Jay Powell had to say about cutting rates again. Paul and I bounced their remarks off S&P’s recently released Q3 2024 Global Economic Update. Spoiler alert: he sees the ECB doing one rate each quarter from here on out. And the Fed making its first move to cut rates in December.

He still sees the Fed moving gradually even as U.S. growth softens and stresses that a “higher for longer” policy will complicate the path toward rate cuts in the rest of the world, especially emerging market nations which have be mindful of preventing capital outflows if the dollar keeps strengthening.

Paul Gruenwald has been Chief Global Economist at S&P Global Ratings since 2013. He started his career at career at the Australia and New Zealand Banking Group (ANZ) as the Asia Pacific Chief Economist, where he was responsible for helping set and direct ANZ’s Asian and global economic research agenda, as well as building the bank’s economic research efforts and profile in the region. Previously, Paul worked at the International Monetary Fund (IMF) for nearly 16 years, where he led the team producing the IMF’s Asian regional outlook reports.

So besides looking at everything from sticky core inflation in advanced economies around the world alongside still solid labor markets, he looked awhat is driving China’s economy now as it still tries to dig out of its property market hole, the challenges facing the Bank of Japan as the yen keeps weakening, and the challenges facing Narendra Modi as starts his third term as India’s prime minister.

Have a look and listen, and let me know what you think.