Bonds & Stocks
Stocks staged a comeback as a global flight from risky assets faded, with Bitcoin halting its slide to support the shift in tone. The moves offered relief after a shaky start to what is typically a strong month for equities, with focus now shifting to the Federal Reserve for clues on the US rate outlook at next week’s meeting. Disappointment from the Fed's decision would pose a risk for equities, though confidence in a cut remains high following softer labor and inflation data and a run of dovish comments from officials.
Economy
Federal Reserve officials are disagreeing on where to stop cutting interest rates and what the "neutral" rate of interest is. The collective Fed is struggling to figure out the neutral rate, with 19 officials coming up with 11 different estimates ranging from 2.6% to 3.9%. There is also disagreement about which way the neutral interest rate is headed, with some predicting it will be pushed up by productivity growth and others saying it will be driven lower by policies such as tariffs and tax cuts.
World
Moscow is struggling to deliver crude cargoes due to US sanctions, with volumes at sea increasing by a fifth in three months. The average voyage time for the ESPO crude grade from Kozmino to Chinese ports rose to more than 12 days for ships loading in November, up from an average of just over eight days in August. The average voyage time for the ESPO crude grade from Kozmino to Chinese ports rose to more than 12 days for ships loading in November, up from an average of just over eight days in August.