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Global economic outlook: Key data from the United States, Europe, and more. 

Financial results and inflation key events so far this year. 

January 13th-17th Week 

The global economic outlook continues to provide crucial insights for understanding market trends. Here’s a summary of the most relevant data: 

  • United States: The Q4 2024 earnings season began with strong reports from JP Morgan, Citi, and other institutions. Meanwhile, inflation closed at 2.9% annually in December, in line with expectations, and retail sales advanced by 0.4%. 
  • Europe: The ECB may continue easing its monetary policy after four rate cuts last year. However, Germany’s economy has experienced two consecutive years of contraction.  
  • Japan and China: Japan is debating potential interest rate hikes, while China showed a recovery in exports with, a 10.7% annual growth. 
  • Latin America: In Mexico, the Plan México was introduced to attract strategic investments, while Argentina ended 2024 with a significant slowdown in inflation, dropping to 117.8% annually. 

Important Upcoming Events:

  • In the United States, Martin Luther King Jr. Day will be commemorated on 01/20. 
  • In the United States, consumer confidence indicators will be released on 01/24. 

Monitor 

Posted in Uncategorized

2025 Perspectives: Analysis of global markets and economic landscape

Discover our annual report ‘2025 Perspectives’ and the key insights for the upcoming year.

The final stretch of 2024 continues to reflect an outstanding performance in the markets, maintaining the positive trend that has prevailed throughout most of the year. This growth has been driven by several key factors that have strengthened global stability:

  • Disappearance of political uncertainty: The resounding victory of Donald Trump and the Republican wave in both chambers have paved the way for a more predictable political environment.
  • Interest rate reductions: The Federal Reserve has initiated a cycle of benchmark rate cuts, creating a favorable environment for investments.
  • Strong earnings performance: Corporate financial results have exceeded expectations, generating a positive balance for the year.

Looking ahead to 2025, the new political agenda is expected to focus on potential tax cuts, reduced regulation, and policies to stimulate the domestic economy. However, the implementation of these measures could present challenges, such as:

  • Trade tensions.
  • A higher public deficit.
  • Rising inflation and higher interest rates.

These factors may pose a challenge for the Federal Reserve, particularly in a context where inflation has slowed to levels more comfortable for the institution.

In this highly dynamic environment, we are pleased to present our annual report, ‘2025 Outlook’. In it, you will find:

  • The perspective of our Investment Committee on this economic scenario.
  • Expectations for each asset class and region.

We are confident this report will provide valuable insights into the next steps to take and how to optimize your investment strategies.

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The Fed cuts rates: Less future adjustments  

The Federal Reserve announced a rate cut but adjusted its projections to show less cuts in the coming years.

In a decision anticipated by markets, the Federal Reserve reduced its benchmark rate to a range of 4.25%-4.5%, returning to levels not seen since December 2022. However, the Fed’s message was clear: a more gradual path of adjustments is expected in the coming years. 

According to the “dot plot”, projections indicate only two additional cuts in 2025, half of what was expected in September. Two more adjustments are projected for 2026, and one more in 2027, with a long-term “neutral” rate estimated at 3%, reflecting a slight upward adjustment. 

Not all Committee members agreed: Beth Hammack, president of the Cleveland Fed, voted against it, continuing the line of dissent that began in November. This marks the first time since 2005 that such a level of opposition has been recorded among the governors. 

The Fed reaffirmed its commitment to monitoring economic data and adjusting monetary policy if necessary. This cautious approach will be key to continuing to balance growth and inflation in the months ahead. 

FED indicators update (December vs. September) 

 

Source: Federal Reserve 

Posted in Uncategorized, Weekly Comment
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