Global central banks cut rates 28 times in Q3 2024 despite inflation risks.

In Q3 2024, a noticeable trend has emerged: central banks worldwide have adopted a series of significant rate cuts. This pattern mirrors the drastic measures taken in Q2 2020 as the world grappled with the onset of the COVID-19 pandemic. Despite lingering inflation risks, many central banks, including the European Central Bank and the Bank of Canada, are opting to lower rates to stimulate economic growth.

China, in a bold move to combat deflation, has slashed its reserve requirement ratio by 50 basis points, injecting approximately $142 billion into the economy for lending purposes.

While these measures aim to revitalize sluggish economies, the question remains: are we risking another wave of financial instability in our efforts to spur growth?

Today, China casually unveiled their most aggressive economic stimulus since the pandemic.

They cut reserve requirements by 50 basis points in an attempt to end deflation.

This freed up $142 BILLION of capital that can now be used for lending. pic.twitter.com/hOlGPxWzia

— The Kobeissi Letter (@KobeissiLetter) September 24, 2024

Sources:

https://www.spglobal.com/ratings/en/research/articles/240626-economic-research-q3-2024-global-economic-update-the-policy-rate-descent-begins-13156013

https://abcnews.go.com/Business/wireStory/chinas-central-bank-cuts-bank-reserve-rates-pledges-113947811

https://www.msn.com/en-us/money/markets/rate-cuts-are-coming-from-the-european-central-bank-and-the-fed-experts-say-the-pace-will-be-mild/ar-AA1qr31m

Silver exploding.

Up almost 5% today.

— Gold Telegraph ⚡ (@GoldTelegraph_) September 24, 2024