The US Federal Reserve will reduce the pace of rate hikes. Inflation in the Eurozone is falling

The US inflation-adjusted GDP rose by 2.9% year-over-year for the latest quarter. For Federal Reserve policymakers, the overall GDP growth picture is what they want to see in line with the economy’s long-term trend.

Elon Musk believes a recession is coming and fears that Federal Reserve attempts to reduce inflation could make it worse. In a tweet yesterday, the Tesla CEO and the Twitter owner called on the Fed to immediately lower interest rates. Otherwise, the Fed risks increasing the likelihood of a serious recession.

The oil price rose to $85-86 on news that OPEC+ countries are willing to cut OPEC production even further. The talks are about an additional 2 million BPD of production cuts.

In November, inflation in the Eurozone fell from 10.6% to 10% year-on-year due to falling energy prices. Core inflation remained stable at 5%. Nevertheless, economists warn that lower inflation is unlikely to prevent the European Central Bank from raising interest rates as food inflation rises. Whether this is the peak of overall inflation remains to be seen. But the current economic situation could push the European Central Bank to hike less by 50 basis points next month

The KOF economic barometer fell slightly in November and now stands at 89.5 points. This is the fifth consecutive drop in the barometer. The outlook for the Swiss economy in the coming months thus remains subdued.

Oil rose almost 3% yesterday on a decline in US crude oil inventories. Traders are also betting that China will ease Covid restrictions and OPEC countries will resort to deeper production cuts this Sunday.

Asian markets mostly rose yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.21% for the day, Hong Kong’s Hang Seng (HK50) jumped 2.16%, and Australia’s S&P/ASX 200 (AU200) was up 0.43% by the end of the day.

Asian indices were boosted by growing optimism that China is easing its stance on COVID-19-related restrictions. Despite high infection rates, several cities in the world’s second-largest economy lifted regional blockades.