From Investing.com: 2025-01-09 03:54:00

In the United States, recent business surveys indicate that clean election outcomes have prompted companies to resume investment and hiring, but risks remain from President-elect Trump’s policy proposals, including immigration controls and trade tariffs that could impact labor shortages, wages, and inflation. The Federal Reserve is expected to slow the pace of interest rate cuts due to lingering inflation concerns and potential fiscal challenges.

In the Eurozone, indicators show ongoing weakness, with moderate growth in the services sector and slow credit growth to non-financial companies. Inflation is expected to rise, and the European Central Bank may continue to cut rates to address economic challenges.

In China, recent policy meetings signal a more proactive fiscal policy and moderately loose monetary policy stance for 2025. The government is easing control over bond yields to lower borrowing costs amid increased bond issuance. Markets remain cautious but policymakers stand ready to respond to potential shocks.

In the rest of Asia, South Korea faces political turmoil affecting consumer and business confidence, leading to weak domestic economy outlook. The Bank of Korea is expected to cut rates to support growth, while the government plans a significant supplementary budget. Central and Eastern Europe central banks are pausing rate cuts amid economic recovery expectations and political challenges, with inflation and fiscal risks on the horizon.

In central banks, the Federal Reserve is forecasted to have fewer and more gradual rate cuts in 2025 to mitigate inflation implications and rising Treasury yields. The European Central Bank may face stagflation concerns but is likely to continue cutting rates to address economic weakness. In the FX market, the dollar’s strength poses challenges for Japan, China, and emerging markets, with non-USD currencies under pressure. For rates, the US Treasury yield is expected to rise, while the ECB normalizes monetary policy. Commodities markets show strength in the oil and gas markets, influenced by supply cuts and geopolitical factors.



Read more at Investing.com: Recent Developments in the Global Economy: US, China, Eurozone and more