The US economy remains modestly positive. The latest figures on industrial production in August posted an uptick of 0.6% m/m and 0.4% y/y. Manufacturing production was down 0.4% y/y, up a little from a negative 0.5% the month before. And capacity utilization inched up to 77.9% from 77.5%. All this implies that the economy is still growing and is not nearly approaching recession territory. 

Meanwhile, the preliminary University of Michigan’s consumer sentiment numbers for the US rose to 92 in September from 89.8 in the previous month and above market consensus of 90.9. The uptick was across both current and expected economic conditions. The final figures will be released toward the end of the month and expectations are that the month-end numbers will be much less favorable than the preliminary figures were. 

We can expect that the FOMC tomorrow will cut its base rate by 0.25 percentage points to give the economy a little boost. This may be enough to keep the economy going at its present clip for a while longer. 

Central banks around the globe are signaling that they will be lowering their base rates as the ECB just announced it intends to further accommodate the European economies. The bank of China, meanwhile, has pushed for more accommodation as well. 

If all this monetary easing continues, we might just dodge the bullet and avoid a global downturn. Adding to the slightly more optimistic outlook is the possibility that Washington and Beijing are on the road to better terms in the trade war.