Interest Speculation and Political Influences Shape the Global Markets

In American financial circles, it is generally expected that the Federal Reserve will lower the key interest rate by a quarter of a percentage point this coming Wednesday. This expectation is supported by a stable inflation level in November, which places the likelihood of this action at 95 percent according to the futures markets. Thus, the Fed's target interest rate range could be reduced to 4.25 to 4.5 percent. Analysts attribute the interest rate expectations to the latest data from the Bureau of Labor Statistics, which shows an inflation rate of 2.7 percent for November, reinforcing the economic outlook. The labor market also appears surprisingly robust, with an employment increase of 227,000 jobs. Nevertheless, strategic uncertainties remain, particularly regarding future interest rate decisions by the Fed in 2025, as highlighted by Brian Levitt of Invesco. Another topic on the international stage is the Bank of Japan, which is under increased pressure due to political turmoil. After Prime Minister Shigeru Ishiba's political gambles led to a deadlock in parliament, interest rate hikes are currently off the table. Criticism from the Democratic People's Party against further rate hikes is dampening market expectations, as analyzed by Naohiko Baba of Barclays. In the UK, economists expect the Bank of England to make an unchanged interest rate decision. Without an accompanying press conference, investors' attention will focus on the nuances of the communication policy. Jack Meaning of Barclays points out that current labor market data could lead to a shift in the majority within the decision-making committee. Another focus is on British inflation, which, according to forecasts by Sanjay Raja of Deutsche Bank, will rise in November. Inflationary developments in services and the increase in national insurance contributions are expected to significantly influence the economic environment in 2025, according to Raja.