A week of high-stakes central bank meetings is about to get even more complicated. With markets already on edge, the upcoming decisions will be influenced by politics and geopolitics.
US Federal Reserve Chairman Donald Trump’s ditching of decades-long foreign policy positions has sent shockwaves globally, leaving allies feeling uneasy. This could lead to a shift in trade policies, impacting economies worldwide.
Central banks are set to take center stage with key meetings ahead. The US Fed is expected to hold interest rates steady on Wednesday but will provide guidance on its next rate cut. June is the most likely candidate for the next reduction.
Meanwhile, other central banks such as the Bank of England, Swiss National Bank, and Sweden’s Riksbank are also set to make announcements. These decisions come amidst a backdrop of rising inflation concerns worldwide.
Emerging markets like Brazil and South Africa will face tough decisions on interest rates this week. Brazil is poised to deliver another 100 bps hike, while South Africa’s policymakers are facing domestic disputes that may impact their rate decision.
As central banks navigate uncertain times, one thing remains clear: politics has taken center stage in the world of finance.
Source: https://www.reuters.com/business/take-five/global-markets-themes-graphic-2025-03-14