Central Banks Seen Slowly Easing Rates in 2024 But Geopolitical Uncertainty and Sticky Inflation Will Restrain Cuts

Most major central banks are expected to cut interest rates in 2024, but the pace of easing will be slow and measured compared to recent tightening.

Inflation is coming down in many countries, but remains sticky and central banks want to guard against it rebounding. This caution will restrain rate cuts.

Geopolitics like conflict between Israel and Iran as well as US elections create uncertainty that may also limit central bank easing.

The Federal Reserve is now expected to start rate cuts in July 2024, later than previously thought. Markets see about 50 basis points of Fed cuts this year.

The European Central Bank is set to be the first major central bank to cut, with a rate reduction probable in June. Further gradual cuts are expected to follow.