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The Federal Reserve is expected to begin a “mild” easing cycle in September, according to Fitch. The ratings agency predicts that the Central bank will cut rates by 25 basis points at both its September and December meetings, with further cuts totaling 250 basis points over the next few years. The gradual pace of easing is attributed to the need to address Inflation, as the CPI remains above the Fed’s 2% target.
Fitch also anticipates rate cuts in China, citing deflationary pressures and falling prices across various sectors. In contrast, the Bank of Japan is taking a more hawkish stance, raising rates to combat persistent deflation. The BOJ aims to achieve a “virtuous wage-price cycle” and is projected to continue raising rates towards neutral settings.
Overall, Fitch’s outlook points towards a nuanced approach to monetary policy in the face of differing economic conditions across regions.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.
