According to Robertsen, the world now has “a little bit too much excess liquidity in the system”, so governments looking to support their domestic economies would pivot to fiscal stimulus, which means more borrowing. “There is a potential tension that we need to be very alert to,” says Robertsen. “For the moment, bond yields are relatively neutral in terms of financing costs. An increase in debt issuance is not necessarily going to cause all kinds of problems in terms of governments’ interest expense ratios.”
As the world emerges from a multi-year peak in global liquidity in 2025, this year could shape up to be a “very, very different” year with the reversal of some of those capital flows. “The flood of liquidity that we saw globally and in Asia, I think, is going to start to turn,” says Eric Robertsen, global head of research and chief strategist at Standard Chartered.
Speaking at the bank’s media roundtable on global outlook, the economist sees three major themes playing out this year: a focus on liquidity, inflation, and central banks’ transition from monetary to fiscal policies, which he calls “underexplored”. For one, in 2025, central banks across the world cut rates more than 150 times, bringing the two-year total to more than 300 — a pace of easing not seen since the “dire straits” of the Global Financial Crisis.
