Europe

As we are witnessing a high inflation in last few years around the world some central banks have decided to cut interest rate and try helping its economy growth. Reuters polled economists of European Central Bank who stated that ECB will cut another 25 basis point from its deposits rate on Dec.12 and another 100bps next year. This rapid move of cutting down interest rates is a response of U.S. tariffs who threatens ECB.

Central banks around the world are witnessing a new trade war who’s going to put some fear in further decision of Central bank’s policymaker. All of this would not be happened if the new elected president of U.S. Donald Tramp proposed tariffs. As witnessing ECB has started to prepare a rapid way to support its economy and to increase production. But is it a justified move to cut down interest rates now, after all EU is still supporting Ukraine at war and inflation has not settled.

The fear is justified and the response should be strongly monitored after all everything may be fine at the end and it may not.

Australia

Unlike EU, Australia in last couple of years has not lower down interest rates and many Australians are wondering how long will it take until RBA lowers down interest rates. After enduring couple of year of monetary tightening where cash rates gone up from 1% to 4.35% RBA is still holding its interest rates who burden citizens and the economy. The rising borrowing costs and elevated prices have slowed down gross domestic product (GDP) but helped as RBA says not to slip into recession.

It looks like Australia does not care about Donald Tramp proposed tariffs for some reason. This might be due to common question for many who watch how RBA is dealing with inflation who is 3.5%. But for now Australian government is not scared of Donald Tramp tariffs or they may be waiting for the right moment to execute a rate cut.

The question is will interest rate go down in 2025, and if they do how much will they go down?

USA

As new elected President of U.S. Donald Trump announced to start trade war next year because that’s one way of stopping U.S. economy downfall because of BRICS de-dollarization afford. But in the meantime Federal Reserve officials say they are likely to keep reducing interest rates for now. Many investors expect to hear an interest rate cut from the Federal Reserve at its Dec. 17-18 meeting.

While job growth slipped in October as many fear and the only who see it different are the policymakers who said that U.S. economy was continuing to beat expectations.

At press conference Nov. 7, Fed Chair Jerome Powell said It’s actually remarkable how well the U.S. economy has been performing, with strong growth, a strong labor market, inflation coming down, after the central bank announced it was cutting its benchmark policy rate by a quarter of a percentage point to the 4.50%-4.75% range.

We keep our fingers crossed for the American economy, but we must emphasize that the trade war that the newly appointed president wants to start only means one thing: the economy is in trouble.