Global central banks have initiated a significant wave of monetary easing, with September witnessing the largest amount of rate cuts since the height of the COVID-19 crisis. The U.S. Federal Reserve led this trend with a dramatic 50 basis points rate cut on September 18, causing the CFR Index of Global Easing to plummet from -2.46 to -8.60, its lowest reading since March 2022. This move was part of a broader pattern, with 21 interest rate cuts conducted globally in September, marking the third largest month of monetary easing since April 2020. Major central banks, including the ECB, BoC, Riksbank, BoE, FOMC, and SNB, are expected to continue this trend with further cuts in the coming months. Financial markets are now pricing in significant rate cuts, with the UK rate futures indicating a potential 42 basis points cut by the end of 2024, up from 36 basis points earlier. The Bank of England is anticipated to deliver a 25 basis points cut at its next meeting. Canada is also expected to cut rates with a 70% probability of a 50 basis points reduction.
First FED cut was in September (jumbo 50bp) but the true pivot arrived in August, looking also from the neural language indicators (inside the speeches of various members). This pivot increased liquidity (via a weaker) and boosted financial conditions. Below... https://t.co/4P0WcdPoZO
Financial markets are now pricing in a shock interest rate cut for the UK at the next Bank of England meeting following remarks by its governor. 🔗 Read more https://t.co/qZodryp4cR
INTEREST RATE EXPECTATIONS FOR G8FX Rate cuts by year-end 🇺🇸Fed: 69 bps (65% probability of 25 bps rate cut at the upcoming meeting) 2025: 182 bps 🇪🇺ECB: 53 bps (97% probability of 25 bps rate cut at the upcoming meeting) 2025: 171 bps 🇬🇧BoE: 42 bps (98% probability of 25…