Rate Cuts Firmly Back on The Agenda For Central Banks

Monetary easing has come very much back on to central bank radars. We have seen rates cut in Australia and India in the past week, while there have been hints of policy easing from the Federal Reserve. US markets are pricing in more than 75 basis points of Fed rate cuts in the next year, starting this summer.

Rate hike expectations have evaporated in Europe and markets are now beginning to look for a small rate cut from the ECB and Bank of England. Expectations of more accommodative monetary policies have seen strong gains by bond markets.