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While the ECB opted for a (recent) increase in interest rates that is considered “dovish” (less stringent), the largest central banks have pressed the pause button. Many analysts believe that interest rates have finally peaked, and markets are already looking forward to the next step: when will interest rates be cut?
Why is this important?
Central banks face three dilemmas: finding a balance between the slowdown in the economy, inflation that is still too high, and the delayed effect of interest rates. The question everyone is asking is whether central banks have gone too far. In this case, interest rates could be cut sooner than expected.In the news: The era of unprecedented monetary tightening is coming to an end.
- Federal Reserve Bank He was the first to announce this month that he would stop raising interest rates. Rates now range between 5.25 percent and 5.50 percent.
- Bank of England This was also followed by a pause announcement, which was indeed surprising, setting the interest rate at 5.25 percent, after 14 consecutive increases.
- European Central Bank decided to increase interest rates by 0.25 percent, but this v
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