The PM’s volatility was on full display on May 11, with silver, gold and mining stocks plunging fiercely. While more economic concern should arise in the 2nd half of 2023.
“In my forecast I need to maintain an accommodative stance of policy for some time to ensure that we actually bring inflationdown from 4% to 2%. I see interestrate cuts this year in my baseline forecast. There is noreason to see.
To explain, the blue line above tracks the Global Composite PMI, while the orange bars above track annualized global GDP growth. If you analyze the relationship, youcan see that the former often leads the latter.
More importantly, the right side of the chart shows how the blue line’s ascent signals resilient GDP growth in the months ahead. Assuch, a PMI of ~54 is nothing like 2008 or 2020, and this is why talk of lower interestrates is much more semblance than substance.
All time history lesson
While the crowd assumes a dying U.S. dollar willhelp revive gold, it’s another narrative that contrasts history.