Comments: In the next 12 months, the Federal Reserve of the Federal Reserve of the Fed

Source: Bloomberg

In the next 12 months, it will become a year of interest rate cuts in some central banks around the world.

After the implementation of the most aggressive tightening policy in 2022 and 2023, as the inflation continues to decline, some central banks are preparing to begin to relax monetary policy.

The current federal fund interest rate (interval limit): 5.5%

Bloomberg Economic Research on the end of 2024 prediction: 4.25%

Market pricing: traders expect that this year will cut interest rates six times this year, 0.25 percentage points each time. The first interest rate cut is expected to be before May.

Current interest rate: 4%

Bloomberg Economic Research on the end of 2024 forecast: 3.25%

Market pricing: Traders' positions of 0.25 percentage points will be 0.25 percentage points on March, but they almost agree that this year will cut interest rates by 1.5 percentage points.

The overall indicator of the global interest rate of Bloomberg Economic Research shows that this year, it is expected to fall 128 basis points, led by emerging economies.

Among the Emerging Economy Central Bank, the central banks of Brazil, Czech Republic, and other national central banks have launched this process.

The Fed will lead the central bank of the wealthy country. Previously, its policy makers hinted that this year will cut interest rates 75 basis points; earlier, the central bank warned that most of the time interest rates may still rise in 2024.

Other central banks (such as the European Central Bank) are more cautious about issuing interest rate cuts, but Bloomberg's economic research predicts that the first looseness may be achieved in June.The market betting on the British Bank will also cut interest rates at that month.

Japan will continue to be unique in similar countries. President Temoda and men are expected to tighten the policy and end the world's last negative interest rate.

For emerging economies, Argentina and Russia will cut interest rates sharply.According to Bloomberg's economic research, the Central Bank of Mexico, which has been resisting interest rate cuts, is expected to have also began to relax the policy.

The interest rate cut depends on the continuous slowdown of inflation.The suspect warning said that most of the price is still a certain distance from the central bank's goals, and the policy needs to keep tightening.

The following is a quarterly guide for Bloomberg's prospects for major central banks.

Federal Reserve

Most Fed officials predict that this year will cut interest rates and start to reverse the most radical tightening policy in the past 40 years to cope with the decline in inflation.But they also emphasized that their measures depend on further improvement in prices and future data.

According to the estimated medium value released in December, the policy makers estimate that the 75 basis points will be reduced to 4.6%in 2024.However, the futures market bet that the Fed will cut interest rates six times this year, and may be reduced by 0.25 percentage points from March.

Fed Chairman Powell and several colleagues emphasized that the central bank can act with caution and imply that they are not in a hurry to take action.Powell said at a December press conference that it is too early to announce the victory over inflation, although he acknowledged that he had discussed when to start the "relaxation" policy restriction.

European Central Bank

In contrast to the Fed, European Central Bank officials are reluctant to talk about the possibility of cutting interest rates.Although inflation is much larger than expected, the growth rate of 20 euro area salary in China is still worrying.Before the second quarter of 2024, it is unlikely to be clear whether such trends are cooling.

The members of the European Central Bank Management Committee refused to support any imminent interest rate cuts -this runs counter to the expected expected interest rate cut within a few months, because the region's economy is facing the first recession since the epidemic.

The key to the present is whether Europe has experienced a gentle decline of soft landing; whether the chain reaction brought by the European Central Bank has unprecedentedly raising the cost of borrowing loans, it will cause economic downturn, which is enough to make the central bank compare with the original than the original.The planned time changes monetary policy settings.