Graphic representation of the global economy: the Fed announces a concert of rate hikes

The Federal Reserve, Bank of England and Sweden’s Riksbank were just a handful of central banks to raise interest rates this week, underscoring the drastic tightening cycle underway as inflation takes hold of the world economy.

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

On the other hand, Turkey surprised with another rate cut, despite inflation at its highest level in 24 years and the lira at an all-time high. Hungarian officials could offer at least one more hike before considering ending the European Union’s most pronounced monetary tightening cycle.


The Fed headlined a marathon week of interest rate hikes, which also extended to central bankers in Taiwan, Sweden and Mongolia. Meanwhile, Brazil and Norway have signaled that they may end their monetary policy tightening. The Bank of Japan stuck to its ultra-low rates and Governor Haruhiko Kuroda said there was little prospect for a near-term rate hike.

The price of copper – used in everything from computer chips and toasters to power systems and air conditioners – has fallen nearly a third since March. Yet some of the biggest metal miners and traders warn that in just a few years a massive deficit will emerge for the world’s most critical metal.

United States

Fed Chairman Jerome Powell pledged the US central bank would crush inflation after authorities raised interest rates by 75 basis points for the third consecutive time and announced even more aggressive hikes than ever before. investors had expected.

Used home sales fell for the seventh consecutive month in August as rising mortgage rates continued to erode affordability and dealt a significant blow to the housing market. The string 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, struggling to repay amid high inflation and rising interest rates, according to a survey. Sixty percent of credit card debtors say they have been in credit card debt for at least a year, up from 50% a year ago, said.


The risk of a recession in the euro zone has risen to its highest level since July 2020 amid growing fears that a winter energy crisis could trigger a collapse in economic activity. Economists polled by Bloomberg now put the likelihood of two consecutive quarters of contraction at 80% over the next 12 months, up from 60% in a previous survey.

Dockworkers in Liverpool, Britain’s fourth-largest container port, voted unanimously to reject their employer’s latest wage offer – and walked off the job for two weeks in a strike that broke its full Tuesday. It is the latest outbreak of social unrest sweeping through major choke points in the global economy.


Singapore appears to be an attractive location for companies looking to leave Hong Kong, but they might find a move to the city-state hurting their bottom line more than expected. With inflation hitting its highest level in 14 years, spending, including hiring talent, office space and utilities, is growing at a faster pace in Singapore than in its financial rival, where increases in prices were more modest.

Early trade data from South Korea showed exports only growing in September, a sign of fallout from lockdowns in China and a struggling global economy. Major exports fell 8.7%, led by a 14% drop in shipments to China.

Emerging Markets

Emerging Asian markets are reaping the benefits of years of accumulation of foreign exchange reserves by becoming a preferred destination for risk investors. Although the dollar has rallied, emerging Asian currencies generally fare better than traditional safe havens such as the yen and euro.

Mexican inflation was flat in early September, leaving Banxico with minimal leeway to reduce the pace of interest rate hikes at its meeting next week.

This story was published from a news feed with no text edits.

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