Abstract
Interest rates move money all around the world. As a result, they directly or indirectly influence business performance, which is partly reflected in the PMI. That is the initial hypothesis of this report. Large-scale purchases almost always involve a bank between buyer and seller. Banks provide liquidity, but never for free, the cost of that liquidity is set by central bank rate decisions. When rates are high, financing becomes harder because every dollar costs more; when rates are low, the burden eases. In short: rates matter for manufacturing. But not all markets behave the same. Developed markets often show a negative correlation, rate cuts tend to stimulate PMI. Emerging markets, however, are more complex. Indonesia and China each have their own structures and policy configurations that make them very different from New York or Frankfurt. Finally, a word of caution: models can reveal patterns, but they are only guidelines. No single model can fully capture the complexity of global markets. They eventually break down when black swan events arrive.