The Long View

Neil Shearing: What the Consensus Is Missing About the Current Economy

Apr 16, 2024

Neil Shearing, chief economist at Capital Economics, discusses unique forecasts for the global economy, including US growth, China's trajectory, and S&P 500 predictions. He explores challenges in economic forecasting amidst the pandemic, focusing on supply-side impacts and regional performances. The podcast delves into emerging markets' resilience to rate hikes, global economic influences like the US impact on growth, and upcoming elections' effects on trade routes and currency markets.

44:41

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Episode guests

Neil Shearing

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Quick takeaways

Anticipated faster decline in US inflation leading to larger rate cuts than market expectations.

Forecast of S&P 500 reaching 5500 suggests prolonged uptrend despite potential bubble concerns.

Deep dives

Diverse Economic Forecasting

The podcast delves into the economic forecasts provided by Neil Shearing, Group Chief Economist at Capital Economics, highlighting three major divergences from consensus projections. Firstly, in the US, while a soft landing is predicted, Neil anticipates a faster decline in inflation leading to larger projected rate cuts than market expectations. Secondly, China's growth is expected to accelerate, with key structural challenges looming. Lastly, Neil emphasizes a long-held forecast of the S&P 500 reaching 5500, indicating a prolonged uptrend despite potential bubble concerns.

Introduction

3min

Navigating Economic Uncertainties and Forecasting Challenges

22min

Emerging Markets Resilience and Global Economic Influences

6min

Fiscal Responsibility, Tax Cuts, and Bond Market Reactions in Government Policy

3min

Global Elections, AI Impact, and Market Exuberance

10min

Closing Remarks and Disclaimers

2min

Our guest this week is Neil Shearing. Neil is group chief economist at Capital Economics, a London-based research firm. He is also an associate fellow at Chatham House, an International Affairs think tank. In his Capital Economics role, Neil manages a team of economists and is a well-known voice in the investment community. He has served as chief emerging markets economist and once managed Capital Economics’ New York office, having joined the firm in 2006 from the United Kingdom’s Treasury Ministry. He holds economics degrees from the University of London and the University of York.

Background

Bio

Chatham House

World Economy, Globalization, and Elections

“China, Inflation, Trade Wars—Your Frequently Asked Questions,” by Neil Shearing, capitaleconomics.com, March 4, 2024.

“Maintaining Market Confidence Is Key to Managing ‘Snowballing’ Public Debt,” by Neil Shearing, capitaleconomics.com, April 8, 2024.

“Pivoting Central Bankers Must Face Down the Ghost of Arthur Burns,” by Neil Shearing, capitaleconomics.com, Jan. 29, 2024.

“Ignore the Straight-Line Forecasts. These Forces Will Shape the Global Economy to 2050,” by Neil Shearing, capitaleconomics.com, Feb. 26, 2024.

“In the China Vs. US Size Stakes, It’s What You Measure That Counts,” by Neil Shearing, capitaleconomics.com, Jan. 15, 2024.

“Trump Trade Wars, Stock Market Bubbles, Japan’s Market Comeback, and the World in 2050,” Capital Economics Weekly Briefing podcast, capitaleconomics.com, Feb. 15, 2024.

“World Economy Is Fracturing, not Deglobalizing,” by Neal Shearing, chathamhouse.org, Feb. 8, 2023.

“It’s All Connected—Why Investors Can’t Ignore the Global Economy’s Megatrends,” by Neil Shearing, capitaleconomics.com, Oct. 2, 2023.