In the last weekly market sense check of the year, global financial markets have had a strong reaction to the U.S. Federal Reserve's final policy decision of 2024.

In brief:

Fed's Hawkish Rate Cut Signals Slowdown: The Fed’s latest decision to cut interest rates by 25 basis points was paired with a forward-looking stance indicating a slower pace of monetary easing in 2025. Despite this reduction, the Fed projects only two more cuts next year.

Economic Data and Market Reactions: Following the Fed's announcement, U.S. stock markets experienced significant declines, and the U.S. dollar strengthened. Additionally, disappointing U.S. retail sales and industrial production figures contrasted with surprisingly strong Australian employment numbers, painting a mixed picture of the global economic landscape as 2024 comes to a close.

Global Central Banks on Hold: The Bank of England and the Bank of Japan maintained their current interest rates, reflecting ongoing concerns about inflation and economic conditions. This conservative stance highlights the diverse challenges facing global economies, with each central bank taking a measured approach to future policy adjustments.


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