Given the moderation in inflation and the potential for significant downward revisions in economic growth, concerns over “rate cuts reigniting inflation” have been overshadowed by the need to “cut rates to save the economy.” As a result, the Fed implemented a 50 basis point cut to avoid a hard landing for the U. [...] unemployment rate in the past three months minus the lowest unemployment rate in the past six months exceeds 0.5, meaning that the U. [...] 54 October 8, 2024 and the appreciation of the Japanese yen will increase the possibility of a global economic recession within one or two years, as well as China’s medium-to-low growth in the next 5 to 10 years, couold lead to slow growth of the global economy. [...] In particular in the long term, the U. [...] Wang is Vice President of the Chung-Hua Institution for Economic Research.) Editor’s Note: The views expressed in this publication are those of the authors and do not necessarily reflect the policy or the position of the Prospect Foundation.
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Table of Contents
- Prospects Perspectives No. 54 October 8 2024 1
- Prospects Perspectives No. 54 October 8 2024 2
- Several factors may explain the Feds decision to reduce interest rates. First 2
- Second the U.S. unemployment rate has risen and job creation has slowed 2
- Given the moderation in inflation and the potential for significant 2
- Looking ahead based on the Federal Open Market Committees dot plot it 2
- The global economic impact of the U.S. interest cut can be analyzed from 2
- In the stock markets initially U.S. investors were shocked by the big rate 2
- Prospects Perspectives No. 54 October 8 2024 3
- As for foreign exchange markets the U.S. rate cut has led to a depreciation 3
- However after cutting interest rates by 50 basis points the U.S. dollar did 3
- Historically a rate cut and dollar depreciation have had short-term positive 3
- Regarding economic growth when the U.S. economy is in decline a sharp 3
- The U.S. unemployment rate in the past three months minus the lowest 3
- Prospects Perspectives No. 54 October 8 2024 4
- In particular in the long term the U.S. economic slowdown combined with 4
- Chinas persistent economic malaise together accounting for nearly half of global GDP could lead to a global economic downturn. 4
- Finally how will the U.S. interest rate affect Taiwans economy After the 4
- In the short term a U.S. interest rate cut prevents a hard landing for the 4
- The views expressed in this publication are those of the authors and do 4
- Prospects Perspectives No. 54 October 8 2024 5
