Over-estimating easing
Substantial rate cuts in most economies are to be expected but what’s up for debate is the speed at which markets are currently pricing further cuts
Add BT as a preferred source
INTEREST rate cuts in advanced economies are likely to gain traction relatively quickly, even with China’s structural challenges deepening. This suggests this easing cycle will be less linear than markets have been pricing.
By the end of 2024, rates in many jurisdictions, particularly the United States, United Kingdom, European Union and New Zealand, are all likely to be meaningfully lower than their recent peaks. The UK has already delivered 25 basis points of easing, the US 50 and EU and New Zealand 75.
Markets are currently pricing extensive and speedy further cuts, which in broad terms involves central banks lowering rates at three-quarters of their meetings and cumulatively and speedily removing a third to a half of the aggressive tightening of 2022 and 2023.
TRENDING NOW
CSE Global independent director quits after clashes with chairman Eugene Lai over board refresh
‘I felt like dying’: Thai Singha beer scion speaks up after disclosure of alleged sexual abuse
Abandoned ‘Titanic’, failing ‘ancient towns’: Why China’s tourism boom leaves white elephants behind
Cat A COE rate exceeds Cat B for third time in 4 months; premiums largely down
