FILE PHOTO: A pedestrian walks past the Bank of England in the City of London, Britain, September 25, 2023. REUTERS/Hollie Adams/File PhotoLONDON : After almost two years of aggressive monetary tightening, the world's biggest central banks are taking time out before weighing up their next move.
In total, nine developed economies have raised rates by acombined 3,965 basis points in a cycle that started in September 2021. Japan is the holdout dove.The Federal Reserve kept rates on hold at 5.25 per cent-5.50 per cent on Wednesday as policymakers struggled to determine whether financial conditions may be tight enough already to control inflation, or whether an economy that continues to outperform expectations may need still more restraint.
With inflation now falling fast and evidence of a slowdown growing, investors have brought forward rate cut bets. Money markets price in a 25 bps rate cut by April.The Norges Bank left its key rate on hold at 4.25 per cent on Thursday and reiterated that it was likely to raise rates in December. The Swiss franc hit its highest against the euro since 2015 on Oct. 20, before falling back somewhat, after the outbreak of conflict in Gaza extended a long run of Swiss currency strength.
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