Will booming equities sustain economic growth?
- Is the flat yield curve signaling a slowdown in the economy in 2020?
- The yield curve has been wrong before, specifically between 1994 and 1999
- Growth slowed in 1994-95, but rebounded strongly from 1997 to 2000
- Why? Booming equities boosted consumer spending, business investment
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China’s 2020 economic outlook
- China boosted credit to counter higher tariffs from trade war in 2019
- It also reduced banks’ reserve requirements, eased monetary policy
- The moves are expected to help the economy grow modestly in H1 2020
- Will debt stimulus lose its punch, decelerate economy in H2 next year?
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