Central banks worldwide facing economic uncertainty, with rate cuts/holds in response

From Yahoo Finance: 2025-06-19 08:33:00

Central banks around the world are facing uncertainty over economic growth and inflation, complicating decision-making. Norway, Switzerland, Canada, Sweden, New Zealand, Euro Zone, United States, Britain, Australia, and Japan are all navigating rate cuts or holds in response to global economic challenges.

Switzerland’s central bank cuts rates to 0% due to falling inflation and economic uncertainty. The SNB is considering negative rates. Canada is on hold at 2.75%, but markets anticipate one more 25 bps cut by year-end. Sweden cuts its key rate to 2% to boost sluggish growth.

New Zealand holds rates at 3.25% to protect the China-focused economy. The RBNZ warns of global trade uncertainties. Euro Zone sees one more rate cut by year-end. The U.S. Federal Reserve holds rates steady and signals potential cuts in 2025. Britain keeps rates at 4.25%, but three rate-setters voted for a cut.

Australia is prepared for rapid rate cuts due to weak growth and trade war fears. The RBA may see borrowing costs drop to near 3% by year-end. Norway cuts rates by 25 bps to 4.25%, surprising analysts. Japan keeps rates steady amidst escalating tensions and tariffs, signaling cautious balance sheet adjustments.

Read more: Global uncertainty puts big central banks in a tight spot