Errante Academy Updates: Central bank rate outlook (holiday-season update)
Markets are showing a clear split in direction across major central banks. The Bank of England is expected to cut rates more than most, while Australia (RBA) , Canada (BoC) and Japan (BoJ) are the main ones expected to raise rates at their upcoming meetings.
Key points by central bank:
➡️Bank of England (BoE): Largest expected rate cuts among peers. Growth is expected to be flat in Q4, and the tone is mildly supportive of lower rates. A notable cut is expected around February.
➡️U.S. Federal Reserve (Fed): Rates are still expected to move lower over time, based on where markets think rates may end up.
➡️European Central Bank (ECB): A pause is expected, with a wait-and-see approach based on incoming data.
➡️Reserve Bank of Australia (RBA): Rate increases are expected, with markets pricing the start of a new tightening phase.
➡️Reserve Bank of New Zealand (RBNZ): Markets see possible rate increases, but recent softer currency moves reflect comments that rate cuts are also possible.
➡️Bank of Canada (BoC): Expected to hold soon, but it is signaling the possibility of higher rates later.
➡️Swiss National Bank (SNB): Expected to hold for now, with possible increases later.
➡️Bank of Japan (BoJ): Still seen as one of the few leaning toward a near-term rate increase.
