Fitch Ratings has noted that while central banks have implemented interest rate cuts globally, financial market volatility and geopolitical and refinancing risks remain significant. The recent shifts in global monetary policy, including rate reductions in the US and eurozone, have bolstered investor confidence and created a relatively stable macroeconomic environment, according to a report released by Fitch.
However, Fitch highlights ongoing challenges such as geopolitical tensions, deflationary trends in China, and potential market volatility. Their forecasts predict a slowdown in economic growth for both the US and China by 2025.
The upcoming US elections and the policy changes that may follow are critical short-term factors to monitor, as they could have a substantial impact on credit ratings. In particular, trade policies may significantly affect the global economy if protectionist actions are intensified by the US, prompting retaliation from major trading partners. Additionally, fiscal and immigration policies under a new government could influence inflation trends and the pace of interest rate cuts.
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