The Congressional Budget Office on Friday forecast a $1.865 trillion U.S. budget deficit for fiscal 2025, largely flat with last year and indicating no major deterioration in government finances before President-elect Donald Trump takes office on Monday. The CBO “baseline” estimates are based on current laws and assume that Trump’s 2017 individual tax cuts expire as scheduled at the end of this year, causing rates to snap back to higher levels. Efforts by Trump and Republicans in Congress to extend current individual and small business tax rates could add over ...

China’s economy rebounded in the last three months of last year, allowing the government to meet its growth target of 5% in 2024, Beijing announced on Friday. But it is one of the slowest rates of growth in decades as the world’s second largest economy struggles to shake off a protracted property crisis, high local government debt and youth unemployment. The head of the country’s statistics bureau said China’s economic achievements in 2024 were “hard won,” after the government launched a slew of stimulus measures late last year. Beijing has ...

U.S. President-elect Donald Trump campaigned on promises of aggressive import tariffs, strict immigration curbs, deregulation and smaller government, but the economy he inherits next week may be screaming for something different. Namely, don’t break anything. With output expanding above trend, the labor market near maximum employment and adding jobs, and the embers of inflation still smoldering, Trump may be launching his promised reforms into an economy less in need of the sort of stimulus his 2017 tax cuts provided. As a stock selloff following last week’s strong December jobs report ...

U.S. Treasury Secretary Janet Yellen said that the government would reach its statutory borrowing limit on Tuesday and would begin employing “extraordinary measures” to keep from breaching the cap and triggering a potential catastrophic default. Yellen, in a letter on Friday to congressional leaders just three days before the Biden administration turns over U.S. government control to President-elect Donald Trump and his team, said the Treasury would begin using extraordinary measures on Jan. 21. “The period of time that extraordinary measures may last is subject to considerable uncertainty, including the ...

Encouraging data point to an upward turn in US industry US industrial production jumped 0.9% month-on-month in December versus the 0.3% consensus while November’s growth rate has been revised up to +0.2% MoM from an initially reported -0.1%. The component breakdown shows manufacturing grew 0.6% after an upwardly revised 0.4% in November with utilities output up 2.1% and mining up 1.8%. Hours worked in the goods producing sector had fallen 0.3% MoM according to last Friday’s jobs report, which explains why economists had expected a weaker outcome, but the ISM ...

Exports end the year on a strong note China’s December export growth rebounded to 10.7% year-on-year from 6.7% YoY in November, beating consensus forecasts. December saw USD335.6bn of exports, bringing the full year exports to USD3.58tr, which was good for a 5.9% YoY growth rate and comfortably higher than what most economists were expecting at the start of last year. December’s data likely benefited from some export frontloading ahead of US President-elect Donald Trump’s inauguration this month. Exports to the US rose 15.6% YoY in December, which marked a 30-month ...

India’s economic growth is poised to rebound as domestic demand regains strength, but “stickiness” in food inflation warrants careful monitoring, the central bank said in its monthly bulletin released on Friday. In India, there is a “conducive quickening” of high-frequency economic activity indicators in the second half of 2024-25, signalling implicit pick up in real gross domestic product growth for this period, the Reserve Bank of India said in an article titled ‘State of the Economy’ in the bulletin. Rural demand continues to gain momentum, reflecting resilience in consumption, supported ...

The European Central Bank is not yet done lowering interest rates, but the timing and size of any future policy easing is not yet certain, Dutch newspaper Het Financieele Dagblad quoted ECB board member Frank Elderson as saying on Friday. “If we lower the interest rate too quickly, dialling down services inflation sufficiently could become complicated,” Elderson said. “On the other hand, if we keep interest rates too high for too long then we risk undershooting our target.” “The markets don’t think we’ve finished easing now that we’re at 3% ...

The Federal Reserve’s recent announcement to enhance the transparency of bank stress tests and mitigate stress capital buffer (SCB) volatility could be incrementally negative for bank ratings if it leads to lower capital buffers, Fitch Ratings says. The Fed’s proposal to average stress results over two years would have a modest smoothing effect on capital requirements, limiting sharp drops and hikes. However, Fitch remains more cautious regarding the transparency initiative, even if it allowed institutions to manage capital more efficiently. This is particularly relevant in the context of a broader ...

In 2024, the planet reached a critical milestone: each of the last 10 years has been the hottest on record. For the first time, the global average temperature over a 12-month period rose 1.5°C above pre-industrial levels, currently at 1.62°C and exceeding the Paris Climate Accord’s target. UN Secretary-General António Guterres starkly described this as the “era of global boiling”, underscoring the urgency of addressing the intensifying and devastating impacts of extreme heat. Among the many climate risks reshaping the world, extreme heat may pose the most profound threat to ...

Japan’s core consumer inflation likely accelerated in December, boosted by higher energy costs, while the Bank of Japan is seen raising rates next week, a Reuters poll showed on Friday. The core consumer price index (CPI), which includes oil but excludes fresh food prices, rose to 3.0% in December from a year ago, according to a Reuters poll of 16 economists. This would be the highest since August 2023, when the index stood at 3.1%. Economists said the government scaling down subsidies for energy costs likely pushed up core inflation. ...

Britain’s finance minister Rachel Reeves said she was tuning out her critics and would continue making difficult decisions in an effort to grow the economy, speaking after a bruising week in which opponents called for her to quit. Concerns about Britain’s slow economy contributed to a surge in its government borrowing costs, while businesses have warned big increases on social security contributions paid by employers, introduced by Reeves, will further dampen growth. Reeves insisted her decisions were correct and said they had been made in the national interest to put ...

When a chief executive unveils a big merger, the fretting begins. Concerns about a repeat of disasters like AOL-Time Warner or Bayer-Monsanto immediately spring to mind. It’s a particular concern for 2025 as steadier interest rates and laxer antitrust enforcement augur a resurgence of chunky M&A. When acquisitions reach $10 billion or more, however, the worst fears of shareholders are often confirmed, with a handful of instructive exceptions. There was some $660 billion of mega-deals last year according to LSEG, a small uptick from 2023 but far short of the ...

At the ECB’s December meeting, the most notable topics included the debate over the size of the rate cut (25bp vs 50bp), a still relatively optimistic outlook for growth and inflation, and the decision to temporarily disregard any potential impact of the US elections on the eurozone economy. The minutes offered some interesting insights on these matters. The highlights An increasing easing bias is evident, as ECB staff projections suggest that meeting the forecasts necessitates rate cuts in line with market expectations. According to the December baseline projections, lower policy ...

The 21st century is when everything changes. The Fourth Industrial Revolution is not an abstract economic idea. Everything from social status to economic geography is shifting right now. These changes are bound up with the current rise in prejudice. Political hostility to immigrants, often using dehumanizing terms, was a common feature of election campaigns throughout 2024. Russia has declared the LGBT movement to be a terrorist organization, and Iraq criminalized same-sex relationships. The Organisation for Security and Cooperation in Europe’s hate crime report documented a depressing tendency to push racial, ...