Clearly, as the Australian central bank joined the flock of doves this week, the world’s central bankers are, on balance, in anything but a tightening mood these days. While, global growth has definitely slowed, Q4’s near bear market in global equities is what truly captured the world’s monetary policy makers' attention.
Critical question being, are they on the mark, or are they being overly cautious? Of course there's a third possibility; are they not being cautious enough? If they're being overly cautious they're setting the stage for global equities to ultimately mount their way beyond last September’s highs.
Frankly, there's no way they're on the mark; they're either too cautious or not cautious enough.
The latter being the case if the U.S. and China can't very soon fix (or appear to fix) their trade issues. Beyond that, the market will begin fretting over the prospects for a deal with the EU (that would be a deal between the EU and the U.S., as opposed to Brexit, which is another big deal in and of itself); which stands to ultimately be equally, if not more, threatening to the global economy and markets.
Given the fact that virtually all focus is on China trade at the moment, markets are likely to rally hard in the wake of a deal; that is if they don't fully discount one between now and the signing. In a no deal(s) scenario a serious global contraction and bear market in equities are high near-term probabilities -- and there'll be little the world's central bankers will be able to do about them.