The Global Markets Monitor is a daily IMF report covering major global financial and economic developments.
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- Global investors expect trends of 2025 to continue into 2026
- US mortgage rates are still elevated despite Fed rate cuts
- Rising commodity prices raise hopes for continued growth in 2026
- Two-year JGB yield at highest since 2007
- Stocks in China extend losses due to factory price pressures
- Argentine provinces compete for data centers
Global markets remain cautious on Fed day
Most equity markets were down and US equity index futures were lower as Fed day finally arrives. Stocks in Hong Kong SAR were outliers as technology companies led gains. Government bond yields were higher in Europe and the US, with the 10-year US Treasury yield hitting 4.20% for the first time since early September. Expectations that central banks are near the end of their rate cutting cycles has driven a Bloomberg index of government bond yields to a 16-year high. The Fed Funds futures markets is setting the odds of a rate cut at today’s FOMC meeting at 97%, and market participants are more focused on the updated dot plot to be released with the Fed statement and Fed Chair Powell’s comments at today’s press conference. The consensus appears to expect a hawkish tone in order to maintain maximum flexibility for Fed policy making in the new year.
