Market volatility, geopolitical risks persist despite rate cuts: Fitch

By Ovunc Kutlu

ISTANBUL (AA) - Volatility in financial markets and geopolitical and refinancing risks persist around the world despite interest rate cuts by central banks, according to Fitch Ratings.

"The turn of the global monetary policy cycle this year, with rate cuts in the US, the eurozone and other major economies, has been a significant contributor to investor confidence and a fairly benign global macro and credit environment, Fitch Ratings said Wednesday in its Risk Headquarters report.

"However, geopolitical and political risks, deflationary pressures in China and capital market volatility risks persist, and our base-case economic forecasts include deceleration of US and Chinese economic growth in 2025," it added.

The rating agency said the US election next week and the policy themes that will emerge with the new Congress and administration next year are the most notable events to watch in the short-term, which potentially have significant implications for credit outlooks.

"Trade policy, in particular, could have a material effect on the global economy should protectionist measures by the US be aggressively ramped up in 2025 followed by retaliatory action by key trading partners," the report said.

"Fiscal and immigration policies could also be consequential, especially should a combination of policies under a new government contribute to reversing disinflationary trends and cause a slowdown in the rate-cutting trajectory," it added.