Global central banks are not over from inflation yet

Central banks continue their fight with inflation, as most countries haven’t reached peak interest rates yet. However, in 2023 at least, monetary tightening is expected to pause — and probably the current policy may even completely reverse.

Federal Reserve Chairman Jerome Powell and European Central Bank President Christine Lagarde intend to tighten policy even further in the first quarter of this year.

Of the 21 jurisdictions tracked by Bloomberg, ten are expected to raise rates, nine are projected to lower, and two are about to hold them at the current level.

The statistics allow Bloomberg Economics to determine the peak of global rate increases at 6% in the third quarter. By the end of this year that number must be 5.8%. That would be the highest since 2001, which would be bigger than the 5.2% level at the beginning of the year.

It’s getting difficult to make any distinct decisions. Rates are increasingly approaching restrictive territory and risk constricting demand so much that the economy could plunge into recession.