Key Highlights
- The US economy is slowing, with rising unemployment and other signs of recession. But a ‘soft landing’ is expected amid indications of rising labour supply and robust corporate profitability.
- The Federal Reserve has initiated a series of consecutive interest-rate cuts that will continue through this year and into the middle of next year. This should help the Fed be perceived as proactive, rather than reactive, in its easing.
- The European Central Bank and the Bank of England are also set to continue their rate-cutting cycles into 2026, while the Bank of Japan is likely to hike rates due to inflation pressures.
- China has implemented substantial policy easing, including rate cuts and fiscal measures, to address weak growth and low inflation. That said, structural economic challenges remain.
- The US election is highly competitive, with significant potential for market volatility as the race between Harris and Trump is close. This will affect the policy outlook and economic sentiment.