Weathering the storms

Global growth rebounded in the second quarter and should pick up a bit further in the coming two years. In advanced economies, demand will be supported by low oil prices and improving consumer sentiment. Meanwhile, although the euro-zone crisis is far from over, we expect the immediate fallout from a “Grexit” to be less damaging than it would have been a few years ago. Similarly, China’s equity market crash should have little lasting impact on growth. The Fed will probably raise rates further and faster than most expect by the end of 2016, but this is largely because the US economy is continuing to strengthen. It will not prevent global monetary conditions from remaining very loose.