Posted 12/10/2023, 9:39:06 AM
Central Banks Cautious on 2023 Rate Cuts Despite Cooling Inflation
- Central banks around the world are approaching final policy decisions of 2022 amid unease over the global inflation outlook.
- Policymakers are hesitating to pivot toward monetary easing despite weakening inflation, instead wanting to see if disinflationary trends will persist.
- The Fed, ECB, and Bank of England have major interest rate decisions next week that could signal a "standoff" with investors expecting rate cuts in 2023.
- Emerging markets like Brazil and Peru have already started cutting rates but developed world central banks aren't convinced inflation dangers have fully passed.
- There are signs of cooling demand and economic growth that could eventually prompt developed world central banks to shift toward cuts in the second half of 2023.