Central Bankers curb their enthusiasm for rate hikes

Bloomberg:Waning global enthusiasm for aggressive interest-rate increases may dominate the dozen or so central-bank decisions due in the coming week.In the wake of the Federal Reserve’s quarter-point move — and a market rally driven by investor euphoria that the inflation shock is finally fading — its peers are already well on the way to stopping as well.

Among the highlights this week, both the Reserve Bank of Australia on Tuesday and the Reserve Bank of India the following day will probably deliver quarter-point hikes in borrowing costs that might mark their final salvos for now.

Poland’s central bank has already halted rate increases and will probably ratify that view on Thursday, while its Romanian counterpart may decide to do the same.

Even in Latin America, where monetary officials stood out in the past couple of years for their early hawkish reaction to surging prices, rate-hiking cycles are running out of steam, not least because of how far they’ve already advanced. Mexico’s central bank, while still determined to act against inflation, may deliver only a quarter-point increase — its smallest move since 2021.

Some monetary officials are still keeping up a hawkish demeanor despite the shifting backdrop. Witness the European Central Bank, which hiked by 50 basis points on Thursday and all but promised to do the same in March.