Inflation remains a key factor shaping global economic policies. In October, the Federal Reserve’s preferred inflation measure accelerated, prompting a more cautious approach toward rate cuts. Meanwhile, euro-area inflation also climbed, though core inflation excluding food and fuel remained stable.
India’s economy grew at its slowest pace since late 2022, and a slump in industrial output pushed Turkey into a technical recession. Here’s a closer look at recent global economic shifts:
US: Inflation and a Robust Job Market
The core personal consumption expenditures (PCE) price index rose 2.8% year-over-year in October. These figures justify the Federal Reserve’s stance to hold off on cutting rates as long as the job market remains strong and the economy continues to grow.
Europe: Rising Inflation and Energy Challenges
Euro-area inflation exceeded the ECB’s 2% target, though officials are likely to continue reducing interest rates in upcoming meetings.
In Germany, reduced renewable energy output forced the country to import electricity from France, where nuclear production hit its highest levels since January.
Asia: Economic Growth Challenges
India’s slowest growth in nearly two years poses a significant challenge for Prime Minister Narendra Modi’s ambitious economic goals.
In Japan, rising labor costs have led businesses to increase service prices at the fastest pace in 32 years, bolstering arguments for a benchmark interest rate hike.
Emerging Markets: Turkey’s Recession and Brazil’s Inflation
Turkey fell into a technical recession in Q3 due to plunging industrial output.
In Brazil, inflation spiked more than expected in early November, driven by historic drought conditions and investor concerns over rising government spending.
Global Trends: Interest Rate Decisions and Geopolitics
Central banks worldwide made diverse rate decisions. New Zealand and South Korea cut rates, while Kazakhstan raised its benchmark rate for the first time since 2022.
As Donald Trump prepares for a second presidential term, speculation grows over the potential revival of his “maximum pressure” policy on Iran, which could significantly impact the country’s oil trade.
