Source: Business Standard - All Editions #6 (8 October 2024)

Global macro and policy backdrop remains complicated, often driven by idiosyncratic factors. For instance, the US Fed lowered the Fed Funds Rate by 50 basis points (bps) in September, the first rate cut in over four years, amid continued softening in inflation, while US growth and labour market display mixed trends. In contrast, China's recent large monetary stimulus was triggered by a surge in fears of a major economic downturn, even though it is far from clear whether such stimulus will indeed support the real economy or will end up boosting financial markets only.

Geopolitical tension escalated further in recent weeks posing palpable risks to the global economy. On the other hand, US elections next month seem to be a close battle, whose result could lead to very different sets of economic and geopolitical implications for the US and the world at large.