The NBR is contemplating a significant shift in its monetary policy, anticipating a derailing disinflation path that could lead to 150 basis points worth of rate cuts by the end of 2024. The NBP, on the other hand, is proceeding with caution after a surprise 75 basis point rate cut. The NBH’s stance may be influenced by the strength of the Hungarian Forint and an inflation rate sitting at 12.4%.
The ECB’s decisions could be swayed by a surge in oil prices and its credibility in fighting inflation. Concurrently, the BoE is considering the projected rise in the average rate on outstanding mortgage debt from 3% to over 4%. Meanwhile, the BoJ is contemplating adjustments to its Yield Curve Control (YCC) policy.
However, these central banks’ decisions could be impacted by various challenges. These include a slowdown in real household disposable income growth, the resumption of student loan repayments, and a decrease in credit availability. Risks such as persistent US consumer spending, financial distress within the banking sector, a resilient eurozone economy, unexpected services inflation or wage growth, and weaker foreign exchange or an unexpected inflation surge are also factors that could influence these decisions.
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Source: Economy - investing.com
