Decline in Global Rate-Cut Momentum in Wealthy Nations

The current trend in global monetary policy shows a noticeable decline in rate-cut momentum among wealthy nations. As 2025 approaches its conclusion, it appears that the easing cycle for several advanced economies lacks sufficient impetus, leading to a cautious stance from central banks.

Global Monetary Policy Landscape

Central banks globally are reassessing their strategies with an eye on the effect of previous decisions on growth and inflation. The complex landscape reflects various national economies grappling with unique challenges. Some key upcoming decisions are likely to shape the future trajectory of monetary policy.

United States and Canada

• The Federal Reserve has recently cut interest rates by a quarter-point but maintains a guarded outlook on future reductions.
• The upcoming US jobs report for November is expected to indicate a modest increase in payrolls, with estimates suggesting a growth of 50,000 jobs.
• In Canada, inflation is projected to remain near the Bank of Canada’s 2% target, influencing their interest rate policies.

Central Bank Decisions in Europe

The Bank of England is anticipated to consider reducing borrowing costs, a decision that may signal the end of its current easing cycle. In contrast, the European Central Bank (ECB) is likely to present optimistic growth forecasts, which are crucial for their ongoing monetary policy stance.

• The ECB’s upcoming meeting will draw attention to their inflation outlook and potential future rate hikes.
• Other European nations are expected to maintain current borrowing costs amidst economic uncertainty.

Decisions in Asia and the Pacific

Asia’s monetary outlook varies significantly, with Japan’s central bank widely predicted to increase interest rates, reflecting improving business sentiment. Concurrently, the Bank of Thailand is expected to cut its rates as part of its ongoing easing strategy.

• Japan’s Tankan survey results are anticipated to show improved business sentiment, supporting a rate hike to 0.75%.
• China is likely to report continued economic weakness, with deteriorating investment levels in the property sector.

Latin America’s Easing Cycles

In Latin America, nations such as Chile, Mexico, and Colombia are scheduled for rate-setting meetings. Analysts expect a continuation of easing policies due to persistent inflationary pressures affecting economic stability.

• Colombia’s central bank is expected to maintain rates, whereas Chile is projected to cut rates by a quarter-point.
• Mexico may face a delicate economic situation, with its central bank likely to consider further cuts amidst moderate economic recovery.

Conclusion

The decline in global rate-cut momentum signals a significant shift for wealthy nations as they navigate through a complex economic landscape. Policymakers are poised to make critical decisions that will influence both growth and inflation in the immediate future, reflecting a careful balancing act amid evolving economic conditions.