Hawthorne Outlook 2025: 11 December 2024
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Market Mood
The European Central Bank (ECB) is expected to cut rates by 25 basis points at its final 2024 meeting to address a faltering eurozone economy, marked by declining productivity, political uncertainty, and contraction in manufacturing, services, and construction. Some analysts suggest a larger cut may be needed, though persistent inflation pressures linked to wage growth complicate the decision. Similarly, the U.S. Federal Reserve is likely to reduce rates by 25 basis points in December, with upcoming inflation data potentially influencing the outcome. Both central banks face the challenge of supporting growth while managing inflation, with further rate adjustments anticipated in 2025 if economic conditions warrant.