Since December, investors’ year-end interest rate expectations have moved towards our own end-2026 policy rate forecasts for all major advanced economies. We think there is a bit further to go before markets fully reflect the rate outlook, which is being driven by diverging economic prospects. Compared to market pricing, we are more dovish on the ECB and Bank of England, less so on the Fed, and while in line on the BoJ, we think that the risks are skewed towards hikes coming earlier than currently discounted.
For further discussion of the monetary policy outlook and to take stock of the latest central bank decisions, join our senior economists on Thursday 5th February at 10:00 ET/15:00 GMT for a 20-minute online briefing. Register here.
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