The great central bank interest rate policy reversal kicks off
Central banks are set to cautiously decrease interest rates to prevent inflation resurgence from low unemployment. Incremental adjustments will differ from past hikes, with expected rates higher than historic lows due to global economic shifts.
Frankfurt | Washington: The world's biggest are on the starting line of reversing a record string of interest rate hikes but the way down for will look very different from the way up.There will be no floodgates or fireworks. Instead, banks on opposite sides of the Atlantic are likely to move in the smallest increments with periodic pauses, fearing that ultra-low unemployment could rekindle still above their targets.
The eventual bottom for is also set to be far higher than the historic lows of the last decade and mega-shifts in the structure of the could put borrowing costs on a higher path for years to come.
Central banks started to jack up rates from late 2021 as post-pandemic supply constraints and surging energy prices on Russia's war in Ukraine sent inflation into double-digit territory across much of the world.
Source: Stocks-Markets-Economic Times
