UPDATE: Following the latest US inflation data, expectations for interest rate cuts have surged, with the Federal Reserve now indicating a likely 45 basis points reduction by year-end. A staggering 97% probability suggests no change during the upcoming meeting on July 15, 2025, as markets recalibrate in response to the recent economic indicators.
The European Central Bank (ECB) mirrors this sentiment, with a 94% chance of maintaining current rates at its next meeting, while the Bank of England (BoE) is facing a 77% probability of a rate cut, with expectations for a 51 basis points reduction by year-end. The Bank of Canada (BoC) also aligns with this trend, showing a 91% likelihood of no change at its upcoming meeting.
The Reserve Bank of Australia (RBA) stands out with a projected 66 basis points cut, as markets react to dismal employment figures released today, firmly anticipating a 25 basis points reduction in their next meeting. The Reserve Bank of New Zealand (RBNZ) is expected to cut rates by 33 basis points, with a 70% probability of a reduction. Meanwhile, the Swiss National Bank (SNB) maintains stability, with an 85% likelihood of no changes ahead.
Market analysts are closely monitoring these developments, particularly the Fed’s response following a slightly more hawkish stance earlier this week, which quickly readjusted after the Producer Price Index (PPI) data was released. Following the hot UK Consumer Price Index (CPI) figures, the BoE’s outlook shifted as well, but soft employment data has led to a forecast of two rate cuts by year-end.
These changes are critical for borrowers and investors alike, impacting everything from mortgage rates to the cost of loans. As central banks navigate these economic waters, the implications for consumers are profound—particularly in housing markets and loan affordability.
Next Steps: Investors and analysts will be keenly watching the upcoming meetings of these central banks. The decisions made in July will set the tone for economic forecasts moving into the latter half of the year. Stay tuned for updates as the situation develops.
