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The messaging from this week’s raft of economic data has painted an increasingly familiar picture of the global economic scene. Headline inflation is finally easing off its highs in large part thanks to ebbing energy prices. But last year’s high levels of inflation and the global trend toward tighter monetary policy that they sparked are now exacting a heavier toll on economic activity.
Investors have shifted their attention back to the economic data and monetary policy over the past few days, marking a shift from recent weeks when political developments took centre stage in shaping financial market sentiment. While this week’s decision by the US Fed to cut policy rates by 25 bps was widely anticipated, the accompanying commentary and forecasts have heightened concerns that US monetary policy will remain tighter for longer in the months ahead. In our charts this week we discuss the following issues:
·     Stock markets and economic data
·     Monetary policy and services inflation
·     Broad money growth and house prices
·     Supply chain pressures and inflation risk
·     The Bank of Japan’s monetary policy
·     China’s economic outlook
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