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2025-12-15 17:59:38
[Global Central Bank Conundrum: Hawkish Surprise Attack, Rate Cut Frenzy Already Changed Before It Even Began?] ⑴ On the eve of the European Central Bank's (ECB) meeting on Thursday, policymaker Isabelle Schnabel's comments surprised the market, hinting that the central bank's next move might be a rate hike, although not soon. ⑵ Due to stronger-than-expected growth and inflation data since the October meeting, market bets on further ECB rate cuts have weakened significantly, with some investors beginning to price in the possibility of a rate hike next year. ⑶ Although the ECB, the Swedish central bank, and the Norwegian central bank are all expected to hold rates steady this week, maintaining them at 2% and other levels respectively, the market is on high alert, watching for any comments from ECB President Christine Lagarde on the policy outlook. ⑷ Meanwhile, a Bank of England rate cut on Thursday seems almost certain, with the market pricing in a roughly 90% probability of a reduction from 4.0% to 3.75%, but Wednesday's inflation data could still introduce uncertainty. (5) Significant divisions exist within the UK Monetary Policy Committee, with Deputy Governor Claire Lombardelli suggesting the easing cycle may be nearing its end, while Dave Ramsden supports gradual interest rate cuts. This division is expected to continue to influence the policy path in 2026.
