In the grand theatre of global economics, uncertainties hover over U.S. policies, potentially decelerating worldwide growth slightly by 2025, as noted by prominent brokerages. President-elect Donald Trump’s anticipated tariffs may stir volatility across global markets. This situation could invigorate inflationary pressures, thereby curtailing central banks’ abilities to relax monetary policies, reports suggest.
U.S. Federal Reserve’s Stance on Interest Rates
Interestingly, many significant financial houses maintain their prediction of a neat 25-basis-point (bp) interest-rate reduction by the U.S. Federal Reserve in December. Recently released data pointed to the personal consumption expenditures (PCE) price index aligning perfectly with market expectations. To delve deeper, the data indicated a 0.2 per cent rise in October on a monthly basis and an annual growth of 2.3 per cent, according to Reuters.
Core PCE Insights
More so, the core PCE, eschewing food and energy volatilities, also matched predictions. It stands as the Federal Reserve’s preferred inflation gauge. Meanwhile, minutes from November’s Fed meeting revealed a certain hesitancy among policymakers about interest-rate cut projections and the restrictive nature of current rates. Earlier, the Fed had dipped rates by 25 basis points, placing the benchmark overnight interest rate within the 4.50 per cent-4.75 per cent band, as detailed in a Reuters report.
Robust Year for World Economies
On a lighter note, the world economies and equity markets have been faring splendidly. A Reuters poll released in October forecasted global growth to average a rather commendable 3.1 per cent for the year. This sentiment echoes with leading banks’ projections for economic growth, inflation, and major asset classes’ performance in 2025.
Also worth exploring: Black Friday vs Cyber Monday: Which day offers the best deals and discounts?
FAQs
What is the status of world economies and equity markets?
World economies and equity markets have basked in a rather prosperous year. A Reuters poll from October anticipates a 3.1 per cent global growth average for the year.
What is expected for the U.S. Federal Reserve’s interest rate cut?
Leading brokerage firms reaffirm their outlook for a 25-basis-point interest-rate cut by the U.S. Federal Reserve this December, following the latest data.
For those pondering over market movements, one might find solace in the nuances and patterns emerging from these economic indicators and forecasts. And lest we forget, while delving into economic discourse, it’s always prudent to peruse further insights such as Gold rate today: Gold prices set for worst fall in one year.
Disclaimer Statement: This content is crafted by an independent party. The perspectives shared belong solely to the respective authors/entities and do not necessarily reflect the views of Economic Times (ET). ET does not authenticate or support any content herein, nor is it liable for any consequences therein. Always verify that any provided information is accurate and up-to-date. ET disavows all warranties, explicit or implied, with respects to the report and its contents.