By Jadarisa Cabong and Alun Johnon
(Reuters) – Large developed central banks on the market are turning caution after a series of interest rates cuts and as uncertainty in global economy and politics are growing.
Of the five central banks that met this week, only the reduced rates of Switzerland, although traders see further relief in the United States and the UK, while Japan remains in the hiking mode.
Here’s a look at 10 major central banks currently standing:
1/ Switzerland
The Swiss National Bank lowered interest rates by 25 basic points (BPS) to 0.25% on Thursday, leaving the cost of borrowing just over zero.
This was the fifth consecutive decrease after the SNB began lowering rates by 1.75% a year ago.
Markets do not see additional reductions from here, noticeable because the SNB is the highest developed central bank on the market. However, policy makers did not rule out the return of negative rates.
2/ Canada
The Bank of Canada lowered its key interest rate by 25 BPS to 2.75% last week, its seventh consecutive decrease.
It plans to “continue with any further changes” given the concerns about inflationary pressures and lower growth.
Economists say the risk of recession caused by tariffs will keep BOC in the relief regime. On the market price almost two more decrease in the rate of 25 bps by the end of the year.
3/ Sweden
Sweden’s Central Bank left footsteps at 2.25% on Thursday and said he expects to keep them at this level now.
Rixbank is firmly in the Dovish camp, facilitating its key 4% to support the weak economy. But with inflation still above its 2% goal, markets agree with policy makers that additional reductions are unlikely.
4/ New Zealand
New Zealand’s backup bank reduced the official cash rate by half a point to 3.75% last month, after reducing rates by a total of 175 BG in seven months.
RBNS Governor Adrian Or, who has since resigned, has proposed additional reductions of 25 BG in April and May that will leave rates in a neutral range. Market prices are widely harmonized.
5/ Euro zone
The European Central Bank lowered the rates earlier this month to 2.5%, which is the sixth decrease since June.
The ECB, however, warned of uncertainty, including the risk of increasing inflation due to trade war and more defense costs.
Policy makers see a greater chance of facilitating the break in April before the footsteps drop again, four Reuters sources said after a March meeting.
6/ US
The Federal Reserve held the footsteps stable on Wednesday and maintained projections for two rates this year, although they warned of “unusually elevated” uncertainty.
Chairman Omeerom Powell said President Donald Trump’s policies, including bulky import tariffs, appear to have led the economy to slower growth and at least temporarily higher inflation.
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