There are signs of weakness in major U.S. economic indicators, including home building and investments, raising concerns that one of the longest periods of economic growth in U.S. history may be coming to an end. These signs also indicate the United States has joined the global economic deceleration amid rising interest rates and tumbling stock markets. In addition, the Fed raised its benchmark interest rate four times as of the end of December 2018, and projects at least two hikes in 2019.
In Europe, France and Spain are grappling with political stresses as Italy’s economy shrinks and the European Central Bank weighs monetary policy. Political uncertainties keep bubbling up, reflecting popular dissatisfaction with the status quo. The eurozone’s reform agenda and economic growth continue to struggle against the difficult backdrop. Adding to the global malaise are falling oil prices. Weakness in oil prices forced OPEC and its allies to try to stabilize the market with production cuts as the United States reimposed economic sanctions on Iran.