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Housing prices are among the most crucial determinants of a country’s financial and macroeconomic stability. As a key macroeconomic indicator, they significantly influence both consumption and investment, shaping economic and financial cycles. Given that housing represents a substantial share of household wealth, price fluctuations have far-reaching effects on consumption, savings, and labor market decisions.

In the first quarter of 2025, economic conditions in the United States reflect a labor market showing mixed signals, alongside persistent inflationary pressures. This context may limit the Federal Reserve’s (Fed) room to cut its policy rate, suggesting a scenario of higher international interest rates for a prolonged period.

In recent years, fiscal matters have taken center stage in both academic research and economic policy debates. This heightened focus is largely a consequence of the significant rise in public debt levels observed across advanced and emerging economies in the aftermath of the COVID-19 pandemic. At the same time, the sharp increase in inflation experienced in many countries led central banks to implement substantial hikes in policy interest rates.

The financial landscape in Latin America is undergoing a transformative shift with the growing adoption of Fast Payment Systems (FPS). These systems, which facilitate real-time or near-real-time financial transactions 24/7, offer numerous advantages over traditional payment methods, such as cash and cards. With features like low transaction costs, accessibility, and immediate availability of funds, FPS is poised to revolutionize how payments are conducted.

Throughout the year, the global economy has experienced a slight deceleration in growth compared to 2023, accompanied by inflation rates aligning more closely with target levels. This trend has enabled central banks in the Eurozone and the United States to initiate reductions in interest rates. For Latin America, this development has led to a decline in the prices of most commodities—although they remain elevated—while external financing costs have gradually decreased, particularly in the second half of the year.

In the past three months, Latin America has faced reduced external and domestic financing constraints, supported by lower interest rates driven by easing inflation in most countries. This context has enabled us to revise the region’s annual growth projection to 2.1% for 2024. However, inflation remains above target in several countries, and public debt continues to rise as a percentage of GDP, underscoring the need for greater fiscal consolidation efforts.

The extractive sector holds great relevance for the macro-financial stability of Latin America. In most economies in the region, significant commercial and financial inflows originate from the extractive industry, and a portion of government income relies on the well-being of these companies, sourced either from the taxes paid by these entities or from the profits generated when the state owns a share of their assets.

This study examines the determinants of hedging practices among commodity-producing companies in Latin America, given the economic significance of the extractive sector in the region. Key factors identified include firm size, leverage, and commodity prices. Additionally, exchange rate exposure and the acquisition of US dollar-denominated debt influence hedging activities, along with access to international markets. Ownership type is also relevant, as state-owned firms, particularly in the oil sector, are more likely to hedge to reduce revenue volatility.

This study reexamines the effects of financial openness on banking stability using advanced machine learning techniques and a diverse set of indicators. Analyzing data from 45 countries between 2010 and 2020, it was found that greater financial openness improves financial stability.

In Latin America, the development of sovereign investment institutions, which can complement the work of finance ministries and central banks in managing state assets, has been somewhat slow. These institutions are key to ensuring macroeconomic stability, saving for future generations, and promoting strategic national development.