Global Growth Recession, Lower Inflation and Monetary Ease Expected for 2012 According to BNY Mellon's Hoey

LONDON and NEW YORK, Feb. 14, 2012 /PRNewswire/ -- A global growth recession, lower inflation for now and monetary ease are expected for 2012, according to BNY Mellon Chief Economist Richard B. Hoey in his February 2012 Economic Update.  The three main risk concerns are the European financial stresses, the Chinese property market and the Middle East, primarily due to oil supply vulnerabilities, as stated in the report.

"Monetary ease in many countries is a key reason why we expect the global economy to avoid a full-scale recession in 2012," Hoey says.

"Unlike many other countries, the U.S. economy is likely to grow faster in 2012 than in 2011," Hoey continued.  "We believe that the Federal Reserve is trying to achieve a gradual deleveraging of the household sector by a 'nominal growth fix.'  Sustaining a 'nominal growth fix' over a period of years could help ameliorate the debt hangover in the household sector over time." (Nominal variables are in current dollars and reflect the sum of both real growth and inflation.) 

"The negative economic consequences of persistently high U.S. budget deficits are being postponed to future years," Hoey concluded.  "One potential negative consequence would be if excessive deficits created a dramatic rise in real interest rates (interest rates relative to inflation).  That is certainly not happening today.  Real yields on Treasury securities are actually negative for many maturities.  High budget deficits should persist for many years, but for now they are easy to finance in the current low interest rate environment." 

See http://www.bnymellon.com/foresight/update-video.html for Hoey's complete February 2012 Economic Update. 

Notes to Editors:

BNY Mellon Asset Management is one of the world's leading asset management organizations, encompassing BNY Mellon's affiliated investment management firms and global distribution companies. Information about BNY Mellon Asset Management can be found at www.bnymellonam.com.

BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets.  BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team.  It has $25.8 trillion in assets under custody and administration and $1.26 trillion in assets under management, services $11.8 trillion in outstanding debt and processes global payments averaging $1.5 trillion per day.  BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK).  Additional information is available on www.bnymellon.com or follow us on Twitter@BNYMellon.

All information source BNY Mellon Asset Management at December 31, 2011.  This press release is qualified for issuance in the UK and US and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorised. This press release is issued by BNY Mellon Asset Management (US) and BNY Mellon Asset Management International Limited (ex-US) to members of the financial press and media and the information contained herein should not be construed as investment advice. Past performance is not a guide to future performance. Registered office of BNY Mellon Asset Management International Limited: BNY Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England no. 1118580. Authorised and regulated by the Financial Services Authority. A BNY Mellon Company(SM)

SOURCE BNY Mellon; BNY Mellon Asset Management

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