AFSM - When Will Central Banks Cut Interest Rates?
2024-04-10 12:30:00 ET
Summary
- Perceptions change with each new data point and each new comment from central bankers. I believe June is the month to watch.
- I expect the US Federal Reserve, the Bank of Canada, and the European Central Bank to cut rates in June, and the Bank of England to cut as soon as May.
- I break down what each economy is experiencing in its labor market, inflation statistics, and inflation expectations - all factors in central banks’ game plan.
This past weekend, I had the privilege of watching the NCAA Women’s Final Four basketball tournament. It occurred to me while watching these extremely talented college athletes that each team is like a different economy, with its own strengths and weaknesses.
Coaches build their game plans around their teams’ unique traits - and central bankers build their monetary policy plans around the inflation and growth conditions of their economies.
And just as women’s college basketball has set new viewership records, all eyes are on which central bank will cut rates next. As each data point comes out (and central bankers comment on it), perceptions change about which central bank will begin to cut when....
When Will Central Banks Cut Interest Rates?