The global central bank is alive and well

AFTER years of common purpose and shared commitment, central bankers are characterised as going their own way. The emphasis on divergence in the path of interest rates, a line often encouraged by officials themselves, is unfortunate and cloaks an underlying theme. The coming year will be defined by easing, almost everywhere.

The only thing up for grabs is the depth of rate cuts – and how they are framed.

Like most narratives, the purported disparity revolves around the Federal Reserve. Usually, the Fed sets the pace for global monetary cycles. While chair Jerome Powell is widely expected to trim borrowing costs next month, and flesh out his thinking in an address at Jackson Hole on Friday (Aug 23), a few authorities have already responded to receding inflation. The European Central Bank, the Bank of England and the Reserve Bank of New Zealand acted recently; China has been sporadically easing – in tiny increments – for a while.