Charting the Global Economy: US to cut interest rates, Europe steps up exit from pandemic-era stimulus
interest rates unchanged this week, but signaled different paths for policy going forward.
Officials in the US are prepared to cut interest rates in 2024, while those in Europe said they’d step up their exit from pandemic-era stimulus. Meantime, policymakers in the UK were more hawkish, with several still supporting a rate hike at Thursday’s meeting.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
US
The Federal Reserve pivoted toward reversing the steepest interest-rate hikes in a generation after containing an inflation surge so far without a recession or a significant cost to employment.
While Chair Jerome Powell said Wednesday policymakers are prepared to resume rate increases should price pressures return, he and his colleagues issued forecasts showing that a series of cuts would be likely next year.
US consumer prices picked up in November on increases in housing and other service-sector costs, keeping inflation stubborn enough to thwart any Federal Reserve interest-rate cuts soon.
Europe
The European Central Bank kept interest rates on hold for a second meeting with inflation tumbling, but said it will step up its exit from €1.7 trillion ($1.8 trillion) of pandemic-era stimulus. Officials, meanwhile, said they’d accelerate the end of reinvestments under the PEPP bond-buying program.
That will put all policy tools into tightening mode, even as fresh projections showed a weaker economy softening the inflation outlook.
The Bank of England kept interest rates at a 15-year high, sticking with its message that borrowing costs will remain elevated for some time despite growing bets on a wave of cuts in 2024. Governor Andrew Bailey said in a statement
