Research Hub Center

Global
Volatility on the rise

The recent rise in volatility demonstrates that the key challenge for
the coming years will be the removal of monetary life support
without hampering economic growth and upsetting market
psychology too much.

The global sell-off confirms the importance of market psychology
after a long period of calm. However, the stock market is not the
economy. Economic indicators remain solid for now. Ten years
after the onset of the financial crisis, the global economy is showing
signs of a synchronized recovery.

Economic activity performs solidly, trade volumes are growing,
corporate profits are on the rise and unemployment is falling. The
combination of extremely loose monetary policy, relatively low
commodity prices (though industrial metal and energy prices have
rallied more recently) and neutral fiscal policy has come to fruition.
So far, however, this is only modestly translating into rising wage
and inflation readings.