Mapping the Global Economy: Fed Headlines Interest Rate Rise Concert – BNN Bloomberg | Pro IQRA News

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The Federal Reserve, Bank of England and Sweden’s Riksbank are just a handful of central banks to raise interest rates this week, underscoring the ongoing cycle of drastic tightening as inflation grips the global economy.

Switzerland, South Africa also raised their benchmark interest rates. Indonesia, the Philippines and Vietnam also raised borrowing costs following the Fed’s decision.

On the other hand, Turkey was surprised by another rate cut, despite inflation hitting a 24-year high and the lira trading at a record low. Officials in Hungary could deliver at least one more hike before considering ending the EU’s steepest cycle of monetary tightening.

Here are some of the charts that appeared on Bloomberg this week of the latest developments in the global economy:

World

The Fed led a marathon week of rate hikes, which also extended to central banks in Taiwan, Sweden and Mongolia. Meanwhile, Brazil and Norway indicated they might take a time-out from tightening their monetary policies. The Bank of Japan is stuck with ultra-low interest rates and Governor Haruhiko Kuroda said there was little prospect of a near-term rate hike.

The price of copper — used in everything from computer chips and toasters to power systems and air conditioning — has fallen by almost a third since March. However, some of the biggest miners and metals traders warn that in just a few years time, a huge shortage will emerge for the world’s most critical metal.

OUR

Fed Chair Jerome Powell vowed the US central bank will crush inflation after officials raised interest rates by 75 basis points for the third time in a row and signaled more aggressive hikes going forward than investors had expected.

Sales of previously owned homes fell for the seventh straight month in August as rising mortgage rates continued to erode affordability and deal a major blow to the housing market. The streak of declines was the longest since the housing market crashed in 2007.

More consumers are saddled with credit card debt for longer periods of time, according to a survey, struggling to repay amid high inflation and rising interest rates. Sixty percent of credit card debtors say they have been in credit card debt for at least one year, up from 50% last year, says CreditCards.com.

Europe

The risk of a euro area recession has reached its highest level since July 2020 as concerns grow that winter energy stress will lead to a slump in economic activity. Economists surveyed by Bloomberg now put the probability of two straight quarters of contraction at 80% in the next 12 months, up from 60% in the previous survey.

The Dockers in Liverpool, Britain’s fourth-largest container port, unanimously rejected their employer’s latest salary offer – and are out of work for two weeks in a strike that takes effect on Tuesday. This is the latest outbreak of labor unrest to hit key points of the world economy.

Asia

Singapore seems like an attractive location for companies looking to exit Hong Kong, but they may find that moving to the city-state is more profitable than expected. With inflation soaring to its highest level in 14 years, spending including talent recruitment, office space and utilities increased faster in Singapore than in its financial rival, where price gains were lower.

South Korea’s preliminary trade data showed exports just grew in September in a sign of the fallout from lockdowns in China and a struggling global economy. Key exports fell 8.7%, led by a 14% decline in shipments to China.

Emerging market

Emerging Asian markets are reaping the rewards of years of building foreign exchange reserves as they become the destination of choice for risky investors. Even as the dollar strengthened, emerging Asian currencies fared mostly better than traditional assets such as the yen and euro.

Mexico’s inflation remained little changed in early September, giving Banxico minimal room to reduce the pace of rate hikes at next week’s meeting.

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