Top central banks' rate hike push fizzles out in September, EM parts ways
By Karin Strohecker and Sumanta Sen
LONDON (Reuters) — Central banks across major developed economies delivered what looked like a last gasp set of rate hikes in September, while economies in both Latin America and emerging Europe were on track for continued easing.
September saw nine of the central banks overseeing the 10 most heavily traded currencies hold rate setting meetings, though just three — Sweden, Norway and the European Central Bank — hiked rates, by a cumulative 75 basis points. The U.S. Federal Reserve, the Bank of England as well as Australia, Canada and Japan all opted for no change, Reuters data showed. New Zealand's central bank did not meet.
September's moves compare to two hikes across four meetings in August — traditionally a more quiet month for monetary policy decisions — and take the 2023 year-to-date tally for G10 central banks to a total of 1,150 bps across 36 hikes.
«We have reached cruising altitude for the central banks — at 4% for the ECB and 5.25%-5.50% at the Fed, I do not see any more hikes in the near future,» said Bjoern Jesch, global chief investment officer at DWS Group.
«Policy is restrictive right now — it will bring down growth, but not in a massive way.»
Markets have seen some seismic shifts in recent weeks after being forced to adjust to the 'higher for longer' mantra propagated by major central banks.
Diverging rate trajectories were on full display in emerging economies where 16 out of the 18 central banks in the Reuters sample held meetings in September.
Latin America and central and eastern Europe are at the forefront of the easing cycle, with Brazil, Chile and Poland lowering benchmarks, taking the cumulative amount of rate cuts to 200 bps for September, and the annual
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