Central bankers dampen hopes for Santa Claus rally

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Central banks on both sides of the Atlantic this week ushered in a new phase in their fight against inflation, but at the expense of raising investor concerns about the outlook for the global economy.

The US Federal Reserve, the European Central Bank and the Bank of England slowed down the pace of interest rate hikes, opting for a 0.5 percentage point hike, but with a side order hawkish comments.

financial markets were left happy warnings that the policy tightening is not yet over. “This is an emerging-market-type repricing after the central bank meeting, which is wild,” one strategist said. Hopes for the Christmas parade dashed.

The Fed was the first to speak on Wednesday. loosening its policy tightening after a series of 0.75 point increases, but also released new forecasts that showed rates are reaching higher levels than previously expected and staying at that level for an extended period. Growth is also expected to be slower and unemployment higher.

This is despite news the day before consumer prices surged to their highs. slowest pace in a year, which caused the growth of US stocks and bonds. A senior Fed official today stepped up the message that investors should not be too optimistic, warning that rates could still exceed 5.1 percent predicted by most politicians.

The ECB followed suit on Thursday. raising rates to 2 percent and a bullish warning with an even more hawkish stance from the head of the ECB. Christine Lagarde reflecting the more viscous nature of euro area inflation.

On the same day, the Bank of England raised the rate to 3.5%. highest level in 14 years. Bank of England Governor Andrew Bailey said the tight labor market and rising wages and prices justify “further drastic monetary police action.”

There was also an increase Switzerland, Norway, Mexico and the Philippines. central bank of russia kept rates at 7.5% after several months of successive cuts to the 20% emergency rate set after the invasion of Ukraine in February.

While factors such as falling inflation and smaller U.S. rate hikes may offer hope for Developing marketsthe general message of the developed economies is clear: fighting rising prices and wages not completed yet.

What you need to know: the British and European economy

Read PMI for euro area was more encouraging than in the UK, bringing more signs that the coming recession will softer than originally feared.

Russian crude oil located sent to india on tankers insured by Western companies, the first sign that Moscow has broken its promise to block sales as part of the price cap imposed by the G7.

The second big read in our series about Russia’s beleaguered economy explores fate of technocrats. Once seen as modernizers and a counterbalance to Putin’s uncompromising veterans of Putin’s security service, they saw their influence diminish and failed to speak out against the war. The US has imposed sanctions against Vladimir Potaninnickel magnate and one of Russia’s richest oligarchs.

What you need to know: World Economy

Despite promises at UN climate talks, global use of coal will reach record high this year and remain high until 2024 due to the war in Ukraine and growing demand in India and China.

New Zealand the economy grew by “colossal” 2 percent in the three months to September – twice as much as expected – thanks to the recovery of construction, services and tourism, when the country reopened its borders. Some see the rise as confirmation of the central bank’s ultra-hawkish stance on fighting inflation.

Peru located in 30 day state of emergency as his fragile interim government struggles to quell protests following former President Pedro Castillo’s failed attempt last week to seize emergency powers.

Homecomingnew book from FT reviewer Rana Foruharoffers a recipe for “a post-global era that listens less to Wall Street interests and more to ‘people and place’ interests.” Read review.

What you need to know: business

US backs 36 more Chinese companies blacklisted deals aimed at slowing down the development of Beijing advanced microchips and technologies that can be used for military purposes. For more on the chip wars, see DT on Wednesday.

mobile games market will decrease this year due to for the first time since the advent of smartphones due to rising advertising spending, falling consumer spending and the halt of the pandemic-driven growth in games. The era began with the introduction of the Apple App Store in 2008, which eventually grew into a $100 billion market that accounts for half of the gaming industry’s total revenue.

think about bankers This Christmas. Wall Street is preparing for big cuts in bonuses after a terrible year when Goldman Sachs cut its payouts at least 40 percent and its number on almost 4000 people.

Science Review

American scientists have achieved the first increase in energy in thermonuclear reaction reaction tom wilson explains what a merger is and how close we are to carbon-free fuels.

Genomics England, British public company, fully decipher DNA from 100,000 newborns. A £105 million research program aims to increase the number of treatable rare genetic conditions to 200.

CSL’s $3.5 million single-dose hemophilia B drug Hemgenix provoked debate on how to pay for revolutionary drugs.

Moderna and Merck to launch in phase 3 trial messenger RNA cancer vaccineas recent evidence suggests that the combination of the experimental cancer vaccine Moderna and the immunotherapy drug Merck can treat melanoma.

British real estate company Canary Wharf Group presented development plans £500M apartment building labas demand for office space falls. The 23-storey building will be one of the largest laboratories in Europe.

Silence at COP15 biodiversity the negotiations that began last week are deadly, written by Gillian Tett. Species are disappearing at an alarming rate, with catastrophic economic consequences.

Covid cases and vaccinations

Total global cases: 644.2 million

General doses: 13.1 billion

Get the latest world picture with our vaccine tracker

good news

Virgin Atlantic announces first transatlantic flight “clean zero”. And more good news in aviation: the era of tiny toilets is almost over: UK airports are set to loosen rules on liquids and electronics inside hand luggage.

Aircraft Virgin Atlantic
The first plane to fly across the Atlantic and run only on sustainable jet fuel will take off next year © Thomas Arnoux/ABACA/Reuters

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