As of late August 2024, the global economic environment is marked by significant volatility and uncertainty, with key indicators showing signs of potential shifts that could impact both the United States and the broader global market. Notably, the oil price has dropped by approximately $10 per barrel, 10-year U.S. Treasury yields have decreased by 70 basis points, and the U.S. dollar index has fallen by nearly 5%. These movements in the “three key prices” suggest a weakening growth outlook, not just for the U.S., but globally as well.
The decline in these indicators points to a potential economic slowdown, with the Federal Reserve likely to begin cutting interest rates and initiating a new cycle of monetary easing. This expectation is underscored by the fact that gold, along with Chinese government bonds, has reached new all-time highs, signaling a flight to safety among investors. The sharp drop in oil prices also reflects concerns about global demand, which could exacerbate the slowdown.
Troubling Economic Data: The U.S. Payroll Revision
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