The world is about to get some much-needed clarity on the US economy's future

The US economy has been clouded by uncertainty due to the upcoming presidential election, leading many consumers and businesses to delay major purchases and investments. Different economic agendas presented by the candidates are creating anticipation, but the race remains tight, delaying immediate clarity on policy directions. However, the Federal Reserve's imminent decision on interest rates, expected on Thursday, could provide some insight into economic directions. The Fed previously lowered borrowing costs in September for the first time in over four years, signaling potential further cuts, but has been closely monitoring economic figures to guide its actions.

As businesses await election results, pivotal decisions like business expansions or home buying are being postponed due to possible economic implications from each candidate's plans. One plan proposes massive changes including deportations and high tariffs, which could elevate consumer prices, while another focuses on enhanced tax credits and deductions to ease economic burdens. Recent surveys indicate that election-induced uncertainty has led many companies to delay or cancel investment plans, with consumers also hesitant to make large purchases. This pause has impacted the housing market, with existing home sales slowing down until elections provide more certainty.

Despite the job market adjustments mainly due to temporary factors like strikes and natural disasters, the labor market remains stable. The Fed aims to maintain this stability, acknowledging that current interest rates remain quite high. This situation aligns with the expectation of another rate cut, a move that could stimulate both the housing market and business investments. Consequently, lower rates might soon encourage those hesitating on the sidelines to engage in the market, contingent on the expected interest rate adjustments.