Charting the Global Economy: Houthi attacks intensify woes for global trade
Federal Reserve received some holiday cheer as inflation continued to soften while consumer demand firmed, and the Bank of Japan stuck with the world’s last negative interest rate.
Meantime, maritime attacks carried out by Houthi rebels in Yemen have disrupted shipping in the Red Sea, prompting a rerouting of cargoes that’s raised costs.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
World
The recent spate of attacks by Yemen’s Houthi rebels on vessels transiting the major shipping route has resulted in several large shipping companies avoiding the waterway. The decision by the world’s five largest container liners — with 65% of global capacity — to suspend transits through it means higher shipping costs and longer delivery timelines.
Still, the effect on inflation in Europe will probably be limited, according to Bloomberg Economics.
Bank Indonesia left interest rates unchanged, Chile sped up the pace of its easing, and Hungary signaled it will keep lowering borrowing costs. Turkey’s central bank delivered its seventh rate hike to curb inflation.
Central bankers in the Czech Republic reduced rates for the first time since 2020.
US & Canada
The Fed’s preferred gauge of underlying inflation barely rose in November and trailed policymakers’ 2% target by one measure, reinforcing the central bank’s pivot toward interest-rate cuts next year. On a six-month annualised basis, the core metric rose 1.9%, the first time in more than three years that this measure is below the Fed’s target.
Even before the Fed has begun cutting interest rates, the mere anticipation of such moves is already thawing the housing market.
