The Fed looks to be on course to raise interest rates by a further 25bp at its December meeting in spite of financial market jitters and disappointing news on the global economy. But as financial conditions continue to tighten and the US economy slows next year, we think that the Fed will bring its tightening cycle to an end and eventually cut rates in 2020. The ECB looks set to end its net asset purchases in December and to wait at least until September before raising interest rates. If the UK leaves the EU in March with a deal, we think that the BoE will raise rates three times next year. But in a “no deal” scenario it would probably cut interest rates. Meanwhile, low inflation in Japan should convince the BoJ to maintain its current policy stance.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services