Bloomberg: "Global CB in Final Stage of Tightening... Peak in Q3"

Analysis suggests that most global central banks, which had pursued aggressive tightening since last year, are concluding their interest rate hikes.

Bloomberg Economics stated in a report on the 10th (local time) that most global central banks are either close to or have already reached the peak of their benchmark interest rate hikes, indicating that the tightening policies are nearing completion.

[Image source=Yonhap News]

Furthermore, an analysis of interest rate forecasts from central banks of 23 countries, which account for 90% of the global economy, showed that 20 of them are expected to cut rates in 2024. It is anticipated that interest rates will peak in the third quarter of this year, followed by rate cuts in most countries next year.

Bloomberg Economics viewed the decisions of the U.S. Federal Reserve as having the most decisive impact.

The report stated, "If the Fed pauses even slightly after one rate hike next month, the direction of the world's most aggressive tightening stance in decades could concretely change."

Bloomberg Economics forecasted that the Fed would raise rates by 0.25 percentage points throughout this year (currently 4.75?5.00%). It expects the Fed to maintain rates at 5.00?5.25% until the end of this year, then lower them to 4.00?4.25% next year.

Tom Orlik, Chief Economist at Bloomberg Economics, said, "The tightening narrative still holds strength, but the peak interest rate is within sight. However, it has not been reached yet."

Meanwhile, Bloomberg Economics predicted that the Bank of Korea would maintain the current benchmark interest rate of 3.5% until the end of the year and lower it to 2.5% next year.