From Morgan Stanley, a pretty remarkable observation about the global monetary tightening cycle, namely that it’s already coming to an end.
What tightening? Looking ahead, global monetary policy
looks set to remain very accommodative throughout the
remainder of this year, on our forecasts. In fact, a few
countries already seem to be nearing a peak, or at least a
prolonged pause in their tightening cycle. In Australia, where
the latest CPI was lower than expected, Gerard Minack thinks
that the next move may well be down (though not before next
year), following 150bp of rate increases since last year (see
page 8). In China, Qing Wang expects the PBoC to ease
credit later this year as the soft landing of the economy
unfolds. And in Brazil, grey Newman now thinks that the
central bank, after slowing the pace of rate hikes to 50bp last
week, has only one last rate hike of 25bp this year up its
sleeve. And while some other central banks are still likely to
raise rates further this year, big hitters such as the US Federal
Reserve, the European Central Bank and the Bank of
England are likely to keep official rates unchanged throughout
the remainder of this year, while our Japan team even
expects the Bank of Japan to ease further later this year.
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