As for the divergent growth prospects in the US and China, we could be affected via the trade channel. If US growth will continue and gain further traction, this could mitigate the impact of a slowdown in China. Furthermore, our domestic financial markets have not been spared from the market volatility that these external developments have stirred.
This has additionally blurred the line between monetary policy and fiscal policy. Ultimately, if a return to monetary policy normality were called for, this could lead to the central bank coming under greater political pressure to keep funding costs at a low level – even if this were to the detriment of the objective of price stability.