CIO Insights: Global Economic Divergence

The U.S. has followed an increasingly more positive, divergent economic growth track this year compared with much of the rest of the world. The U.S. appears to have achieved a moderate, sustainable growth path while other developed economies, especially in Europe, struggle with more muted growth. We outline key aspects of these divergent growth paths, while our discipline CIOs and their investment teams delve more deeply into the ramifications for their specific markets.

Read the full Q4 2014 CIO Insights introduction: Global Economic Divergence: Our Insights

  • U.S. economic fundamentals have improved, while those overseas generally have not.
  • We see moderate sustainable growth ahead for the U.S. compared with deflation concerns in Europe and warning signs among the biggest Asian economies as well.
  • This global divergence is also being expressed in the respective monetary policies of the major central banks in the developed world.
  • The U.S. Federal Reserve (Fed) is winding down its monthly bond purchase program (quantitative easing, QE) and preparing to raise short-term interest rates.
  • Conversely, the European Central Bank unveiled a package of additional monetary stimulus, and the Bank of Japan continues to pursue its aggressive easing program.

The opinions expressed are those of G. David MacEwen and Victor Zhang and are no guarantee of the future performance of any American Century Investments portfolio.

For educational use only. This information is not intended to serve as investment advice.