Europe is stagnating and global demand remains inadequate
The prospect of higher interest rates remains the bête noire of financial markets, judging by their recent performance. Weak growth and low inflation data have spurred strong stock and bond market gains, more than offsetting July’s sell-off. Rather than worrying about sharply higher rates, though, investors should focus on the risk of a flatlining global economy.
The state of the global economy resembles nothing so much as a soufflé on the brink of implosion.