October Econ Newsletter
What happened in October?
Interest rates: On 17th of October, the ECB decided to lower its three key interest rates by 25 basis points. New statistics on inflation show that the ECB is likely on track to achieving its 2% medium-term target by 2025. In the US, as of 31st October, the FED has kept the Federal Funds Rate at 4.83%, taking a more cautious approach (at least for now) to tackling inflation.
BRICS summit: Took place in Russia on 22-24th of October, this year focusing on shifts in global trade, currency alignment and economic cooperation between emerging market economies.
The energy sector: On 25 th of October, European gas prices hit a record high for the year following news of a Norwegian production outage. Norway has replaced Russia as the EU’s top gas supplier, but the outage shows the market’s sensitivity to news of potential supply disruptions.
What to watch out for in November?
US presidential elections: Will be held on 5th of November. With the possibility of Donald Trump winning the elections, the IMF has issued a warning that global protectionism would endanger the world’s economic outlook, raising concerns over the prospect of rising tariffs.
Economic Data: As 2024 comes to a close, new reports on unemployment, consumer confidence, and manufacturing will be published, revealing important insights into the state of major economies around the world.
Interest rates: Markets expect that the FED will cut interest rates by 25 basis points on 7 th November, given that inflation has come down significantly from its 7% peak in 2021. ECB predicts that inflation will rise again slightly before lowering again to meet targets.
Sources
https://www.ecb.europa.eu/press/pr/date/2024/html/ecb.mp241017~aa366eaf20.en.html
https://www.macrotrends.net/2015/fed-funds-rate-historical-chart
https://www.bbc.com/news/world-66525474
https://brics-russia2024.ru/en/summit/
https://www.ft.com/content/909271cd-7b5c-4f50-80bd-80869b565578
https://www.ft.com/content/ab4c0c11-7c08-47cf-9776-7fa92a12ffc5
https://fred.stlouisfed.org/releases/calendar
https://www.forbes.com/sites/simonmoore/2024/10/29/markets-see-another-cut-at-november-fed-interest-rate-meeting/
Editor: Alexandra Digby
Author: Ada-Sofia Karoliina Kari