According to Deutsche Bank (DB) research, there is a shift in the trend of central banks' actions. For the first time since January 2021, more central banks are cutting rates than hiking them. This change emerged in October, with 10 central banks opting for rate cuts, outnumbering those raising rates within the same timeframe. DB's analysis encompassed 81 central banks globally, and in November, five central banks, including those in Brazil and Peru, have already implemented rate cuts.
While major central banks like the US Federal Reserve and the European Central Bank are presently maintaining steady rates, there is speculation that they might initiate rate cuts in the coming months.
Although we believe the rate hike cycle is likely behind us, we conjecture that seeing a substantial global easing cycle may be challenging unless the US faces a significant recession. This is because inflation levels across major economies are still around target levels. The Fed has raised interest rates 11 times since March 2022 to counter rising inflation, which increased by 3.2% yoy in October.
