- Central banks around the world are scheduled to shift from raising interest rates to lowering them in 2024.
- Moderate inflation and a resilient economy suggest the Fed has some breathing room.
- Bank of America expects the central bank to cut interest rates 152 times in 2024, the most since 2020.
Today's chart comes from Bank of America, which predicts a sharp increase in central bank interest rate cuts in 2024.
The combination of easing inflation and ideal levels of economic growth suggests that central banks around the world are beginning to shift from suppressing inflation to managing business cycles.
Such a shift would give the central bank a runway to fine-tune interest rate policy by cutting rates after aggressively raising rates more than 300 times between 2021 and 2023.
Economists at Bank of America predict that the world's central banks will cut interest rates 152 times in 2024, an unprecedented amount of monetary easing by central banks due to the coronavirus pandemic. This is the largest interest rate cut since 2020, when the
In the United States, the investor consensus is that the Fed will cut interest rates at least five times, assuming they cut rates by 25 basis points each time. Meanwhile, some investors expect the Fed to cut interest rates as many as 11 times in 2024.
Central banks have historically mostly taken their cues from the Fed, so if the Fed starts cutting interest rates, the entire world's central banks will likely follow the Fed's lead.
JPMorgan's Phil Campore told CNBC on Friday: “The Fed is not the only one that is suspending and perhaps easing monetary policy. Many G4 central banks are in the mood to ease the situation a little bit. I think so,” he said.
