Global markets drop amid Fed’s cautious approach, concerns over inflation
Date
12/21/2024 12:39:12 PM
(MENAFN) Global markets experienced significant selling pressure on Thursday as the US Federal Reserve's conservative outlook on interest rate cuts and President-elect Donald Trump’s anticipated protectionist policies sparked fears of prolonged inflationary pressures.
Analysts predict the Fed will reduce rates only twice in 2025, with some speculating that the number of rate cuts could drop to just one, fueled by strong macroeconomic data that suggests ongoing economic resilience.
US GDP grew by 3.1 percent in the third quarter, surpassing expectations, according to data released on Thursday. The Personal Consumption Expenditures (PCE) index, excluding food and energy, climbed by 2.2 percent, exceeding forecasts.
First-time unemployment claims fell to 220,000 last week, below analysts’ predictions. However, the US Philadelphia Fed Manufacturing Index dropped by 16.4 percent, signaling ongoing contraction in the manufacturing sector.
On the housing front, sales of existing homes increased by 4.8 percent in November, outperforming expectations.
Gold prices stabilized at USD2,600 per ounce, while US 10-year Treasury bond futures remained just below the previous close at 4.56 percent on Friday.
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