NAB Morning Call All systems go for a Fed cut next week
Dec 11, 2024
In this engaging discussion, Gavin Friend, NAB's market economist, unpacks the intricacies of global monetary policy. He analyzes the Fed's imminent decision on interest rate cuts and delves into the Bank of Canada's recent moves, highlighting their effects on economic indicators. Friend also examines the challenges central banks face amid contradictory policies and shares insights on upcoming Australian employment data. Tune in for a deep dive into the complex dynamics shaping our financial landscape!
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Fed Rate Cut & Pause
- US CPI data was in line with expectations, suggesting a Fed rate cut next week.
- However, there's debate on whether the cut will be followed by a pause, given the economy's resilience.
Bank of Canada's Rate Cut Approach
- The Bank of Canada cut rates by 50 basis points, but signals further cuts will be less frequent.
- They've reached the upper end of their estimated neutral rate, changing their approach.
China's Potential Yuan Devaluation
- Rumors suggest China might devalue the yuan to counter US tariffs, potentially impacting the Australian dollar.
- This could escalate the trade war, as Trump might retaliate with higher tariffs.