Global Borrowing Costs Hit Highest Since 2007-08 Financial Crash as Q4 Looms
The final quarter of the year is about to kick off in a tumultuous environment. Global borrowing costs have reached their highest since the 2007-08 financial crash, largely due to turbulent bond markets caused by concerns over the Iran war, fiscal worries, and AI debt.
Main world stock indexes are still near all-time highs, having risen more than 12% for the year thanks in part to AI euphoria. However, Q4 has plenty of challenges ahead, including rising interest rates, potential conflicts in the Middle East and Ukraine, and a tight Brazilian election on November 3.
US employment and inflation data will be closely watched this week, with September's nonfarm payrolls report expected to show a rise of 100,000 jobs. The unemployment rate is forecasted at 4.2%. Additionally, the monthly Personal Consumption Expenditures price index will provide insight into whether high inflation is moving towards the Fed's 2% annual target.
The Federal Reserve has a roughly 50/50 chance of hiking interest rates again in October, according to futures pricing. A measure of prices paid by businesses for inputs surged to a nearly four-year high this week.