A wave of interest rate cuts around the world, the US is ‘cautious’…
The U.S. Federal Reserve’s (Fed) interest rate cut is being delayed. However, each country is already drastically reducing interest rates.
Most central banks in major countries have started or are planning to lower interest rates.
Bloomberg News diagnosed on the 1st local time that interest rate cuts in each country may not occur quickly or simultaneously, but it is inevitable that interest rates will eventually be lowered.
According to Bloomberg, among 23 countries, Japan judged that there was no possibility of an interest rate cut within the next 18 months.
It was announced that the global base interest rate will fall by an average of 1.55% by the end of next year.
Each country has rapidly raised interest rates since the coronavirus pandemic, but it is estimated that there is no possibility of quickly reinstating this.
Just as the Federal Reserve is still cautious about lowering interest rates, central banks in other countries will also show a downward trend in a more gradual manner than when raising interest rates.
Also, movements in each country are different.
Bloomberg reported that in the United States, the current federal funds rate cap is 5.5%, but is expected to drop to 5% by the end of this year.
Meanwhile, the Bank for International Settlements (BIS) recommended that central banks in each country set strict standards for interest rate cuts.
According to the Financial Times (FT), the Bank for International Settlements said in its annual report last month, “An early interest rate cut could reignite inflationary pressures and lead to a situation where the policy has to be changed again.” “By then, the credibility (of the central bank) has already been damaged.” “Because of this, all costs will be high,” he pointed out.
BIS also said that as inflation slows and growth remains resilient, the global economy is expected to make a ‘hard landing’, but there is a possibility of rising service prices and wages, and there is a need to leave room for interest rate cuts to prepare for a rapid cooling of the economy. emphasized.
It added that the financial system remains particularly vulnerable to high levels of public absence and falling commercial real estate prices.
Editor. Seyeong Hong
