Central banks and markets now aligned on rate cuts

While the Fed and Bank of England held rates as expected, the accompanying forecasts and commentary from key policymakers have helped to align futures markets with central banks

Andrew Bailey, Governor of the Bank of England, says rate cuts are now “in play”.

Following a busy week of central bank meetings and major policy changes, policymakers and markets are now more aligned on the outlook for rates in 2024.

Notably, the shift by the Bank of Japan marked a symbolic end to its negative rate and yield curve control policies. While deflationary pressures have eased for now, it remains to be seen how far the BoJ can hike rates further in the near term.