Table of Contents:
Introduction to global monetary policies
In December, central banks around the world prepare for important meetings that could significantly influence the global economy. The European Central Bank (ECB), the Swiss National Bank (SNB), the Federal Reserve (Fed) and the Bank of England (BoE) are at the center of attention of investors and analysts. Expectations are high, and the decisions that will be taken could have lasting repercussions
on the financial markets.
Expectations for the ECB and the European context
The ECB will meet today and the markets expect a possible cut in interest rates by 25 basis points. Experts, such as Kevin Thozet of Carmignac, suggest that concerns about the slowdown in economic growth, accentuated by trade tariffs and political uncertainty, could lead to a lower than expected reference rate. However, a 50-basis point cut seems unlikely, especially in light of the surprising growth recorded in the third quarter. The ECB could, therefore, take a more cautious approach, seeking to establish a more accommodative monetary policy
.
The decisions of the SNB and the Swiss context
Today, the meeting of the Swiss National Bank was also held, which decided to lower the guide rate by 50 basis points, bringing it to 0.5%. This move was motivated by below-target inflation and modest economic growth. The SNB seems intent on following the ECB in the rate-cutting cycle, but its effectiveness remains uncertain, given that the Swiss franc is more related to the performance of gold than to interest rate differentials
.
The Federal Reserve’s prospects
On December 18, it will be the Federal Reserve’s turn, which could announce a second consecutive cut of 25 basis points. However, the markets do not seem to be betting on a radical change in monetary policy. The Fed is expected to conclude the cycle of cuts in the first quarter of 2025, maintaining an accommodative approach in the short term. However, if US fiscal policies were to stimulate growth and inflation, the Fed could adopt a more restrictive stance in the
medium term.
Expectations for the BoE and the British context
Finally, the Bank of England is in a similar position, with markets expecting its policies to align with those of the Fed. However, the economic outlook in the UK is different, and the BoE could follow the example of the ECB rather than that of the Fed. The hopes of a recovery in consumption are uncertain, and this could influence future decisions of the BoE
.
Conclusions on global monetary policies
In summary, central banks are facing a complex and uncertain economic environment. Interest rate expectations are high, but final decisions may prove to be more cautious than expected. Investors will need to remain vigilant and ready to adapt to an ever-changing economic landscape, while central banks seek to balance growth and inflation in an increasingly interconnected global environment
.
