The dovish turn of the major central banks indicates that the threat of global slowdown is looming. Comment.

US Fed has kept the rates unchanged and hinted at its readiness to easing the policy. Fed may consider cutting rates in near future to tame the threats which are facing the US economy. Even the European Central Bank has hinted to cut the rates and even slash bond purchases if the inflation does not ease. This is signalling an impending global slowdown primarily triggered by the US-China trade tensions and also the development of a precarious geopolitical situation in the Gulf. The pressing question is that if the rate cuts will be able to boost the global economy, especially in the case when rising trade wars have crippled the movement of goods and services.

Topics: GS-III: Indian Economy Issues Relating to Planning