Economic Update: Rates, Tariffs, and Growth
Week of February 17 to 21
Below are some key points that reflect the current economic landscape in different regions:
- United States: The Fed’s minutes show that members require further inflation reduction before lowering rates again. Governor Michelle Bowman emphasized the need for more data confirming inflation progress. Meanwhile, President Trump announced the possibility of imposing 25% tariffs on imports of automobiles, semiconductors, and pharmaceuticals starting April 2.
- Europe: Geopolitical tensions escalated after U.S. talks with Russia about a potential peace agreement in Ukraine, excluding Kyiv and the EU. In the UK, inflation reached 3% year-over-year, the highest in 10 months, surpassing the 2.8% expectation, driven by smaller drops in airline fares and higher fuel prices.
- Japan: The economy accelerated in Q4 2024 with an annualized growth of 2.8%, surpassing the 1% forecast, driven by higher consumer spending and increased CAPEX. Exports in January grew 7.2% year-over-year, led by the automotive sector oriented toward the U.S.
- China: President Xi Jinping reaffirmed his support for the private sector and urged companies to “show their talent.” The People’s Bank kept the one-year reference rate at 3.10% and the five-year rate at 3.60%.
- Mexico: The Bank of Mexico reported that international reserves reached $232.724 billion, the highest level since 1995. However, the growth forecast for the year was revised down to 0.6% (from 1.2%) due to lower consumption and private investment. Preliminary figures indicate a 1.8% year-over-year growth in January, with only a 0.1% monthly increase.
These events and figures will be essential for understanding the current economic context and its possible repercussions. If you would like more information or wish to discuss how these factors might impact your investment strategies, we are at your disposal.
Important Events in the Coming Weeks
- In the U.S., the second revision of Q4 2024 GDP will be released on 02/27
- In the U.S., the PCE inflation data, closely followed by the Fed, will be released on 02/28
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