Key Fed decisions and changes in the global economy
Summary of key events: Fed rate cuts, elections in Germany, and mixed data from Asia impacting global markets.
Week of December 16 to 20
We bring you the most relevant events shaping the global economic landscape:
United States:
- The Fed reduced its benchmark interest rate to a range of 4.25%-4.5%, returning to December 2022 levels. According to the “dot plot,” only two additional cuts are expected by 2025.
- Congress reached a funding agreement to prevent a government shutdown, valid through March, despite opposition from President-elect Donald Trump.
Europe:
- Inflation in the UK reached 2.6% year-over-year in November, aligning with expectations, while the Bank of England kept its rate at 4.75%.
- Germany will hold early elections in February following a vote of no confidence in Chancellor Scholz.
Asia:
- Japan’s manufacturing sector is contracting, but its services industry partially offsets the decline.
- In China, while industrial production grew by 5.4% year-over-year in November, retail sales hit their weakest point in three months.
Latin America:
- In Brazil, the real fell to its lowest level in two years, while Credit Default Swaps reached a 14-month high due to fiscal uncertainty.
- Mexico received a stable rating from S&P, highlighting its macroeconomic prudence and fiscal stability.
Weekly Summary
Key events in the coming weeks
- In the United States, consumer confidence data will be released on 12/23.
- In the United States, the week will be shortened due to the Christmas holiday on 12/25.
Monitor
