Analysts at Citigroup have warned financial markets are currently in a "death-spiral" as tumbling commodity prices are making it difficult for central banks to fight disinflationary forces, with repercussions felt far and wide.
The group's researchers, led by Jonathan Stubbs, have described a "negative feedback loop" in the global economy that is being driven by lower oil prices, the US dollar, weaker trade, capital flows and declining growth in emerging markets, according to Bloomberg. "It seems reasonable to assume that another year of extreme moves in US dollar (higher) and oil/commodity prices (lower) would likely continue to drive this negative feedback loop and make it very difficult for policymakers in emerging markets and developing markets to fight disinflationary forces and intercept downside risks," ...
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