LONDON : The United States, Britain and Sweden all cut interest rates this week, even as Donald Trump’s U.S. election win introduced a fresh element of uncertainty given the threat of higher tariffs.
Seven of the 10 big developed-market central banks tracked by Reuters are in easing mode, two are keeping rates higher for longer and one, outlier Japan, is hiking.
Here’s where major rate-setters stand and what traders expect next.
1/ SWITZERLAND
The Swiss National Bank has been at the forefront of rate cuts, lowering borrowing costs three times in 2024 to 1 per cent since it kicked off easing in March.
With inflation at its lowest level in more than three years, at just 0.6 per cent, traders expect the Swiss National Bank to deliver another quarter point rate cut at its Dec. 12 meeting. Markets attach almost a 30 per cent chance of a bigger half-point move.
Policymakers have suggested the SNB could consider negative rates to make the safe haven Swiss franc, whose strength has hurt exporters, less attractive to investors.
2/ CANADA
Canada is firmly in the dovish camp, having cut rates four times in a row since June. In October, the Bank of Canada cut rates by a bigger-than-expected 50 basis points (bps) to 3.75 per cent as inflation eases below its 2 per cent target and the economy weakens.
The BOC is tipped to cut rates again in December, with traders attaching almost 50 per cent chance of another half-point move.
3/ SWEDEN
Sweden’s Riksbank on Thursday cut its key rate by 50 bps to 2.75 per cent, as anticipated, and flagged another reduction in December if the economic and inflation outlooks remain unchanged.
Markets give a roughly 60 per cent chance of a quarter point cut in December, with almost 100 bps of easing priced in by