Global Central Bank U.S. Fed Economic Data and Global Rate Decisions

This week marks a pivotal moment for global central bank financial markets, with several central making important rate decisions. The U.S. The Federal Reserve is expected to cut interest rates, while Japan, the U.K., and Sweden will announce policies. Additionally, key economic data will be released, offering insights into global economic recovery. Consequently, these announcements will shape expectations for future monetary decisions.

U.S. Federal Reserve’s Rate Decision

The U.S. Federal Reserve will make its final rate decision of 2024 on Wednesday. A 25 basis-point cut is widely anticipated, driven by inflation control. Attention will also be on the Fed’s future policy stance, as President-elect Donald Trump’s economic policies could influence inflation in the coming years. The market expects only two additional rate cuts in 2025. Analysts are awaiting the release of the latest economic data, including the November PCE inflation, the Empire State Manufacturing Survey, and retail sales, to gauge the economy’s strength.

Canada’s Inflation and Housing Data

On Tuesday, Canada will release its November inflation data, followed by the Bank of Canada’s policy decisions. Consequently, investors will focus on understanding the central bank’s future rate plans after recent cuts. Additionally, Canadian housing starts data will be released on Monday, providing further insights. These reports will offer key clues on the housing market’s performance.

Mexico’s Rate Expectations

Mexico’s central bank is set to announce its rate decision on Thursday. Citi economists predict a 25 basis-point reduction to 10%, following weaker-than-expected inflation data. A larger rate cut of 50 basis points remains a possibility, with the market awaiting further economic indicators.

Eurozone’s Economic Outlook

The eurozone will release flash purchasing managers’ indices (PMIs) for key countries, including France, Germany, and the broader region, on Monday. These figures will shed light on the economic performance of the area. With the European Central Bank’s recent GDP and inflation forecast revisions, economic growth remains subdued. The eurozone will also release inflation data and consumer confidence surveys later in the week.

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The U.K.’s Monetary Policy and Economic Data

The Bank of England will announce its rate decision on Thursday. Most analysts expect rates to remain unchanged at 4.75%. The BOE is likely to continue its cautious stance, with further cuts anticipated later in 2025. The release of November inflation data may influence future monetary policy decisions.

Scandinavian Central Banks’ Actions

Sweden’s Riksbank and Norway’s Norges Bank will announce their rate decisions on Thursday. Sweden plans to reduce its policy rate. The expected 25 basis point cut follows the significant reduction in November. Analysts anticipate the central bank will maintain its cautious approach moving forward.

Japan’s Rate Expectations and Inflation Data

The Bank of Japan will hold a two-day monetary-policy meeting this week. Economists disagree on rate hikes timing. Some expect the BOJ to raise rates in December, while others predict a January delay. Analysts will closely monitor November inflation data, which should show a slight pickup from fading energy subsidies.

China’s Key Economic Data Release

China will release important economic data for November, offering crucial insights into recent stimulus measures’ effectiveness. Moreover, key indicators like retail sales, fixed-asset investment, and industrial production will be closely watched. Investors will focus on China’s property market, seeking signs of stabilization in housing prices. Consequently, these reports will influence expectations for China’s economic outlook.

Other Key Developments in the Asia-Pacific Region

Bond traders in Australia await the midyear budget update, while New Zealand will release economic growth data for Q3 on Thursday. Thailand, Indonesia, and the Philippines will also announce their rate decisions, with expectations for cuts in some countries due to slowing inflation and growth.

As global central banks around the world navigate their monetary policies, the data released this week will be critical in shaping global economic forecasts for the year ahead.