The Federal Reserve announced at the latest FOMC meeting that it would maintain its current interest rates, a move that was widely anticipated by the markets. This decision keeps the federal funds rate within a range of 5.25% to 5.5%. The Fed also signalled its intention to implement one more rate hike before the year’s end and fewer rate cuts in the coming year, a departure from previous indications. In addition to this, members of the Fed significantly increased their economic growth forecast for the current year, now expecting a 2.1% increase in gross domestic product.
“We want to see convincing evidence really that we have reached the appropriate level, and we’re seeing progress and we welcome that. But, you know, we need to see more progress before we’ll be willing to reach that conclusion,” Fed Chair Jerome Powell said.
China is currently grappling with a substantial capital outflow, the largest in years, which is exacerbating challenges for its struggling yuan, and raising concerns among authorities. The yuan is under pressure due to the swift exit of capital from China’s financial markets, driven by global companies seeking alternatives and increased international travel straining services trade.
Recent official data revealed a $49 billion capital outflow in the previous month, a level not seen since December 2015. These factors collectively strain China’s economy and currency, forcing authorities to address these economic issues while trying to stabilise the yuan amid significant capital flight.
Indonesia’s parliament has given the green light to the 2024 state budget, totalling $216 billion, with the aim of aiding President Joko Widodo’s final-year development initiatives. The budget allocates a higher state expenditure of 3,325 trillion rupiah to support a 5.2% economic growth target while maintaining a budget deficit at 2.29% of GDP.
Additionally, the government has upped its assumed crude oil price to $82 per barrel for the coming year due to rising global prices. President Jokowi’s focus in his last term is to complete crucial projects and policies, including infrastructure and reforms while anticipating robust GDP growth of 7% by 2027-2028 if his successor continues these strategies.
As Michele Bullock assumes her position as the new head of Australia’s central bank, she enters the role amid a backdrop of criticism that had engulfed her predecessor. This discontent stems from the significant rise in living expenses during the previous leadership’s tenure.
The Reserve Bank of Australia (RBA) had halted interest rate hikes after a year of aggressive increases. While markets expect Bullock’s initial meetings to maintain stable rates, she believes rates may need to rise again due to persistent high inflation in Australia.