Econoday Unplugged

Financial markets remain volatile and seemingly at the mercy of the latest inflation data. At the same time, diverging performances among the major economies continue to provide scope for a broader decoupling of central bank monetary policies.

In recent weeks, speculation about U.S. interest rate cuts this year has shifted from multiple reductions to higher-for-longer and, in some quarters, even to no any ease at all. So, what is the most likely scenario now?

It’s taken them 17 years to do it but the BoJ has finally raised key interest rates. Max Sarto, Econoday’s Japan expert, discusses what they did and what it means for the economy and financial markets.

Many central banks still seem to attach more risks to easing too early than too late. And while that will reflect the perceived economic fallout from either action, the prospective impact on policy credibility should not be ignored.

So far in 2024, the major central banks have resisted pressure in financial markets for early interest rate cuts. Pushback in some quarters has become more vocal so just how long will it be before key rates are lowered?

Much like 2022, there can’t be many forecasters unhappy to see the back of 2023. Nonetheless, with crystal ball in hand, here’s what the Econoday team think will be driving global financial markets in 2024.

This year has produced the usual string of surprises for global financial markets. The Econoday team reflect on which of these shocks had the most important impact on international investors.

Financial markets are increasingly anticipating interest rate cuts in 2024 despite many central banks sounding much more cautious. The Econoday team looks at what the economic data suggest will happen

In the face of extreme monetary tightening abroad, speculation was rife that the BoJ might finally be forced to follow suit yesterday. In practice, such talk proved overly aggressive. Max Sato and Jeremy Hawkins discuss what actually happened and what it means.

It took a while, but investors now seem to accept that many central banks will be keeping key interest rates at high levels for longer than originally expected. And with that, comes increased downside risk to financial markets and economic growth. The Econoday team discuss the potential fallout.