From Yahoo Finance: 2025-03-20 20:00:00

President Trump’s policies are throwing central banking into disarray, with global monetary policymakers struggling to predict future interest rate movements. Federal Reserve Chair Powell emphasized uncertainty as the US kept rates unchanged, while other central banks are pausing on policy changes due to the unpredictable international landscape.

The Bank of England shifted away from its dovish stance, citing international risks and high policy uncertainty. Central banks worldwide are grappling with tariffs and trade policy uncertainty, with the Swiss National Bank cutting rates to relieve currency pressure. The ECB is torn between cutting rates and maintaining a pause at its upcoming meeting.

Trump’s tariffs on global trade have led to retaliation and the looming threat of reciprocal tariffs that could reshape the trading system. European nations are preparing to borrow billions for defense, further complicating global markets. The OECD downgraded global growth forecasts amid policy uncertainty, leading to potential rate cuts or hikes in response to inflation.

Trump has called for rate cuts to ease tariff impact, adding to central bank uncertainty. The Fed is waiting on clarity before adjusting rates, with political upheaval and trade barriers clouding the economic outlook. The role of central banks as policy leaders is shifting in response to unpredictable global events.

Read more: Central Bankers Move Slowly Through Fog of Trump’s Trade Wars