Signs advertising currencies light next to the exchange office in Moscow, Russia, Tuesday, Dec. 16, 2014. After a massive overnight rate hike by Russia's Central Bank, the ruble staged a two-hour rally Tuesday morning before rolling back to new historic lows. The surprise Central Bank decision to raise the rate to 17 percent from 10.5 percent came in the early hours on Tuesday in a desperate attempt to prop up the troubled currency. It's the biggest interest rate hike since 1998, the year when Russia defaulted on its sovereign bonds.
Associated Press
LONDON - No one said the recovery from the global financial crisis would be easy and 2014 provided that in spades.
While the U.S. economy, the world's largest, is showing clear signs that its recovery is self-sustaining, the picture elsewhere is far less rosy entering 2015.
Concerns remain over the Chinese economy, the world's second-largest, while Japan, the No. 3, has fallen back into recession despite a raft of stimulus efforts. And in Europe, economic stagnation appears to be the new status quo despite the welcome news that Greece's savage six-year recession is over.
In the U.S., the Federal Reserve has called time on its monetary stimulus after six years and has hinted that it could start raising interest rates in 2015 from near zero percent. As a result, the dollar was in the ascendant on foreign exchange markets and Wall Street investors grew increasingly optimistic over the economic outlook - the S&P 500 index hit a series of record highs.
Firms also appeared to be caught up in the growing optimism. Following years of retrenchment that saw companies accumulate cash reserves, U.S. companies are once again taking risks. There were a number of headline-grabbing deals in 2014, including Facebook's $22 billion buyout of WhatsApp.
Elsewhere, the legacy of the global financial crisis remains, notably in Europe, where the European Central Bank is considering a larger, Fed-style stimulus to shore up the ailing economy of the 18-country eurozone and avoid a debilitating bout of deflation - falling prices can further weigh on growth.
Russia is one European economy that's ending 2014 in far worse shape than how it started the year. Following a collapse in oil prices and sanctions imposed on Russia for its actions in the Ukraine crisis, Russia is heading into recession and its currency, the ruble, has plunged.
For most of the rest of the world, the fall in oil prices to 5-year lows below $65 a barrel is an unexpected economic boon. Consumers are feeling the benefit at the pump almost immediately while businesses may have extra cash available to invest.
Many factors were behind the oil price decline, including the slowdown in growth in China. Supply factors played a role too, with production growing in countries likes Iraq and Syria.
Despite the boon from lower oil prices, developing economies had a volatile year. Many of their markets were roiled ahead of the Fed ending its stimulus - since much of the money created by the stimulus had been funneled by investors into high-yielding developing markets. That market turbulence is likely to persist next year, too.
Investors expect higher stocks in 2015, but also turbulence
In this Monday, Nov. 17, 2014 file photo, people walk on a pedestrian crossing in Tokyo. Japan, the world's third-largest economy, continues to struggle. Despite its latest efforts to deal with its two-decade economic stagnation, Japan slipped back into recession in the third quarter largely as a result of a sales tax imposed by the government of Prime Minister Shinzo Abe. Even so Abe was re-elected in elections in December.
Associated Press
In this Tuesday, June 10, 2014 file photo, an oil field employee welds a pipeline in the desert oil fields of Sakhir, Bahrain, at sunset. Not all financial assets went up this year. The most notable faller in financial markets was the price of oil which slumped over 40 percent on a combination of factors, including the rise of shale gas production in the US and the return of steady supplies from countries like Iraq and Libya.
Associated Press
In this Friday, Sept. 19, 2014 file photo, Arthur Jiang, of Beijing, poses for a photograph in front of the New York Stock Exchange on the day of Alibaba's initial public offering in New York. Growing confidence was also evident in the number of companies looking to float their shares on the stock market. One of the biggest of all-time was Alibaba, the Chinese e-commerce company, which raised around $25 billion.
Associated Press
In this Monday, Oct. 27, 2014 file photo, Bernadette de Margerie, widow of former Total SA Chief Executive Christophe de Margerie, gestures at her husband's coffin, comforted by Elysee Palace secretary-general Jean-Pierre Jouyet, after the funeral service at Saint Sulpice church in Paris, France. De Margerie was killed in a plane crash at a Moscow airport. The private jet he was traveling on hit a snowplow on takeoff.
Associated Press
In this Tuesday, Oct. 21, 2014 file photo, a man walks past a billboard displaying the future skyline, near a construction site in Beijing, China. For the Chinese economy, the world's second-largest, it's been a year of flux. Though its slowdown may not be dramatic, it is one of the global economic concerns going into 2015.
Associated Press
In this Thursday, July 31, 2014 file photo, an office worker looks over at a man sleeping inside the container he uses to collect cardboard for recycling, at the financial district in Buenos Aires, Argentina. Emerging economies have had a very volatile year in 2014. Argentina was one that made the headlines after it defaulted on its debt after a dispute with hedge funds.
Associated Press
This Feb. 19, 2014 file photo shows WhatsApp and Facebook app icons on a smartphone in New York. One sign of the growing confidence in the US economy was an increase in corporate deals. One of the most high-profile was Facebook's $22 billion acquisition of the mobile-messaging application WhatsApp.
Associated Press
In this file photo taken Thursday, Nov. 13, 2014, people queue outside the Church-run Galini charity's soup kitchen in central Athens. The 18-country eurozone is struggling to post growth of any substance. One positive note was confirmation that the savage six-year recession in Greece has ended. However a political crisis in Athens is brewing as the year comes to an end, renewing fears over Greece's economic future.
Associated Press