The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
McDonald's reported a sharper-than-expected 1.5% drop in global sales for the third quarter, its steepest decline in four years. The burger chain's struggles stem from muted demand across key markets, including the US and Europe, compounded by the fallout from a deadly E. coli outbreak in the US. The company’s shares were down 2.4% before the market opened, despite beating profit expectations.
The E. coli outbreak, linked to slivered onions in Quarter Pounders, led McDonald's to temporarily halt serving the burger in 20% of its US restaurants. The outbreak has caused 75 infections and one death, further dampening US sales recovery efforts. Customer visits in the US dropped sharply in late October, raising concerns about the near-term impact of the outbreak on sales.
International markets also saw a 2.1% decline, particularly in France, the UK, and China, as consumers cut back on spending. Additionally, the Middle East conflict and boycotts over McDonald's perceived pro-Israeli stance added further pressure, particularly in urban markets.
Despite the challenges, US comparable sales grew 0.3%, thanks to promotions, while McDonald’s CEO Chris Kempczinski emphasized the company’s focus on affordability as customers become more cautious about their spending.
The company posted earnings of US$3.23 per share on an adjusted basis, slightly above analysts' estimates of US$3.20. However, analysts remain concerned about McDonald's ability to navigate the ongoing E. coli fallout and sluggish demand across major markets.
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