By Karin Strohecker and Vincent Flasseur
LONDON (Reuters) – The world’s major central banks surprised markets in June with their most monthly interest rate hikes so far this year, and added to the In a downturn, more austerity is ahead as policymakers try to gain an upper hand in the fight against inflation.
Regulates Seven of the nine central banks for the most traded currency At the meeting in June Reuters data showed two opted for a rate hike but two opted not to raise rates.
Both Norway and the Bank of England surprised the market with larger-than-expected 11 basis point moves last month, Canada and Australia resumed their rate hike cycle. Sweden, Switzerland and the ECB also tightened policy, bringing the total of monthly rate hikes to 60 basis points last month. May raised rates six times in six meetings.
Tiffany Wilding, an economist at PIMCO, said: “While some central banks have made tentative progress in reducing inflation, central bankers in general still face challenges. difficult balancing act.”
“If fiscal policy is not ready to save the world, we could see a more uncertain growth environment with increasing cyclical downside risks.”
The latest G initiative brings a total of 2022 Statistics on interest rate hikes The central bank raised the interest rate to 50 during the interest rate hike period basis points. Looking at Norway’s measures since the start of the interest rate hike cycle in September 650, the major central banks have raised interest rates 3 times so far, 650 base point.
While the Fed’s pause at its June meeting was no surprise, the hawkish outlook from the world’s top central bank sent markets into a tizzy.
“We believe the central bank has more work to do,” analysts at Vanguard Group said in their mid-year outlook. “In our view, the final step towards lowering inflation to the central bank’s target is likely to be the most challenging.”
In emerging markets, there is more evidence that the tightening cycle is losing steam.
13 of 10 central banks in developing economies in Reuters sample The central bank held its rate-setting meeting last month. However, the 22 central bank chose to keep policy unchanged.
Turkey’s central bank outperformed in EM tightening cycle starting in spring 650, new governor Hafize Gaye Erkan caught up with 650 basis point hikes, signaling a return to more orthodox policymaking. This is the second major rate hike in the near term since Russia was forced to raise interest rates by 1,11 emergency rate after its invasion of Ukraine. At the same time, the People’s Bank of China lowered interest rates by basis points.
Emerging markets raised interest rates for the year totaling 1, 60 basis points to 2022 Rate hike – less than one-fifth of 2022 7, 60 basis point tightening. The total cut for the two moves is 60 bps.