Presidential approvals, Turkish inflation and fodder for history buffs
This week's chart covers the following topics:
The sluggish 2020s extend a multi-decade plateau in global growth
This chart can be applied to different countries using Macrobond’s change region functionality.
We’ve entered the fifth year of the 2020s, so it’s not too early to start thinking about decade-on-decade economic comparisons.
This chart uses data from the World Bank and International Monetary Fund to compile global GDP growth rates from 1960. The coloured stripes represent the mean growth rate for each decade.
Even as the post-Covid snapback led to the quickest growth since the 1970s, the lingering damage from the pandemic makes the 2020s the weakest decade on our chart.
Interestingly, the 1990s, a golden era for the American economy, were only slightly better than the 2020s on a global basis. This could reflect the depth of the contraction in post-Soviet and other post-Communist states. China, meanwhile, had already started to grow quickly, but from a much lower share of global wealth than it has today.
Turkey’s inflation problem spreads across the economy
This chart can be applied to different countries using Macrobond’s change region functionality.
Disinflation might be taking hold in much of the world, but not in Turkey.
The central bank has spent half a year unwinding the unconventional interest-rate policies formerly espoused by President Erdogan, but inflation has only become worse – ending 2023 at a whopping 65.7 percent. Meanwhile, the currency is sliding to more record lows.
It's a historically uncommon moment for the Fed to end rate hikes
Unemployment versus inflation is the classic central-banking tradeoff. Therefore, it’s historically unusual, though not unknown, for the Federal Reserve to stop tightening policy when inflation remains higher than the unemployment rate.
The moments in time on this scatterplot represent the final rate hikes in Fed cycles going back to 1957. Data points below the dotted line show moments when unemployment exceeded the inflation rate at the time.
Recommended by LinkedIn
Just four cycles are on the other side of the line – all in the inflationary 1969-81 era bookended by Paul Volcker’s crushing interest-rate hikes.
Today, we are again north of the dotted line, but just barely. US unemployment stands at 3.7 percent, while inflation, as defined by the change in the year-on-year core consumer price index, is 4 percent. Jerome Powell is hoping to land a disinflationary soft landing; his critics charge that he risks repeating the mistakes of the 1970s by halting rate increases (as the market assumes he has) before inflation has truly been crushed.
Macrobond News
The Macrobond community is giving its forecasts for 2024
With the new year upon us, our customers are providing their outlooks for the global economy.
What would you like to see in Charts of the Week?
Got a suggestion for an innovative visualisation or interesting subject matter? Write to us at chartoftheweek@macrobond.com.
One platform. Unlimited insight.
Macrobond Financial delivers the world’s most extensive macroeconomic and financial data alongside the tools and technologies to quickly visualise and share insights - via beautiful, dynamic charts and tables.
By putting a world of intelligence at your fingertips, we empower you to make more informed investment decisions, more quickly.
Read the latest edition of our Charts of the Week newsletter here: https://ow.ly/s0OJ50QqQu5