The Bank for International Settlements released its annual report yesterday, enumerating a litany of concerns about the global economic outlook. Reflecting on the most recent deceleration, the BIS wrote “the economic momentum in advanced economies [has been] too weak to generate a robust, self-sustaining recovery.”

Among the advanced economies, Europe is in the most challenging position. Although recession has not been declared formally, the evidence of contraction is clear enough. European leaders will meet beginning this Thursday in Brussels and are expected to grapple over stimulus measures. The anchor economies remain at odds over how to proceed, with Germany appearing increasingly isolated in its resistance to more flexible crisis-response measures. If France and Italy do not persuade Germany, the perceived failure of the summit may trigger a new wave of volatility in financial markets.

Navigating the recovery’s domestic fault lines, the Federal Reserve committed last week to continuing the maturity extension program otherwise set to expire at the end of June. Over the next six months, the Fed will adjust the composition of its balance sheet, exchanging $267 billion in short-term securities for longer-term bonds.