Confidence in the global economy slipped, according to a survey of over 1,500 professional investors surveyed by Bloomberg. The cause?
Central banks around the world are starting to withdraw some of the extraordinary stimulus measures put in place in response to the financial crisis last year.
The professional global confidence index dropped from 61.7 in October to 60.3. October's number was the highest that's been seen since the index was rolled out two years ago. Despite the dip, however, the index exceeded 50 for the fourth month in a row. That indicates financial professionals are still optimistic about the global economy.
The drop came as many central banks around the world are starting to pull back on the emergency measures they rolled out in order to avoid bubbles like the one that inflated in housing recently. Financial professionals are concerned that at a time where unemployment is still rising in many countries, pulling back on these measures will remove support from the economy at a time where consumers are still holding on to their wallets.
In the United States, which is the world's biggest economy, analysts are concerned that with unemployment rising, GDP growth will slow or perhaps slip into negative territory. Some view the recent growth in GDP as a short term pop due to stimulus spending by the government. With unemployment continuing to rise, they argue, once the stimulus spending ends, the economy will turn down again.
Even in countries that have weathered the economic storm better than others, like Brazil, many have concerns. The index for South American financial professionals dropped from 72.9 to 66.5. And in Brazil, the region's biggest economy, the index fell to 86 from 88.3.
Central banks around the world are in a difficult situation. They can't let asset bubbles inflate, or we'll be right back to what happened when the housing bubble popped. And they've got to spur growth, because the economy is still on shaky ground.
Whether they'll be able to balance these two concerns remains to be seen.
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Central banks around the world are starting to withdraw some of the extraordinary stimulus measures put in place in response to the financial crisis last year.
The professional global confidence index dropped from 61.7 in October to 60.3. October's number was the highest that's been seen since the index was rolled out two years ago. Despite the dip, however, the index exceeded 50 for the fourth month in a row. That indicates financial professionals are still optimistic about the global economy.
The drop came as many central banks around the world are starting to pull back on the emergency measures they rolled out in order to avoid bubbles like the one that inflated in housing recently. Financial professionals are concerned that at a time where unemployment is still rising in many countries, pulling back on these measures will remove support from the economy at a time where consumers are still holding on to their wallets.
In the United States, which is the world's biggest economy, analysts are concerned that with unemployment rising, GDP growth will slow or perhaps slip into negative territory. Some view the recent growth in GDP as a short term pop due to stimulus spending by the government. With unemployment continuing to rise, they argue, once the stimulus spending ends, the economy will turn down again.
Even in countries that have weathered the economic storm better than others, like Brazil, many have concerns. The index for South American financial professionals dropped from 72.9 to 66.5. And in Brazil, the region's biggest economy, the index fell to 86 from 88.3.
Central banks around the world are in a difficult situation. They can't let asset bubbles inflate, or we'll be right back to what happened when the housing bubble popped. And they've got to spur growth, because the economy is still on shaky ground.
Whether they'll be able to balance these two concerns remains to be seen.
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