Inflation has been falling towards the policy targets of leading central banks after late summer/autumn peaks, with price pressures in Asia easing off by the most, as energy and supply chain shocks have subsided in many economies.
Implementation of particularly tight monetary policy by leading central banks since March 2022 looks set to crimp global growth in 2024. This leaves many investors asking when, and no longer whether, these banks will start cutting rates.
The US fed funds futures market is currently pricing a high likelihood of a March 2024 cut from the US Federal Reserve, but forecasts from analysts for the date of a first easing of US monetary policy range from March 2024 to late in 2024.
Arguably, there is no strong conviction in financial markets about the likely timing. It all depends on whether inflation continues to subside as rapidly as it has this autumn.
To read more about the US Federal Reserve’s apparent pivot towards looser monetary policy in December 2023, click here.
