HANNAH SELL assesses prospects for the global economy after the recent US interest rate cut.
On 18 September, the US central bank, ‘the Fed’, cut interest rates by 0.5%, the first cut in four and a half years. The US stock markets, already frothy, responded by surging to record new highs, taking it as an indication that the US economy is heading towards ‘a soft landing’.
Central bankers are also hoping that they might have pulled off a miracle. As Christian Lagarde, President of the European Central Bank, put it, recent years have been a “severe stress test” for capitalism, with “the worst pandemic since the 1920s, the worst conflict in Europe since the 1940s and the worst energy shock since the 1970s”. Now the bankers hopes are rising that they might have successfully weathered those storms.
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