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An analysis by Pepperstone, an Australian online trading platform based in Melbourne, shows the major central banks are easing monetary policy as concerns over upside inflation wanes and in response to weak economic data.

“The message, over the last 10 days or so, from monetary and fiscal policymakers across the globe, has been clear, and undeniable – the policy ‘put’ is well and truly back,” Michael Brown, Senior Research Strategist at Pepperstone, wrote on 26 September 2024.

The Federal Open Market Committee (FOMC), the rate-setting organ of the US Federal Reserve, delivered a larger-than-expected interest rate cut of 50 basis points (bp) at its September 2024 meeting, bringing the Federal Fund Rate to the range of 4.75% to 5%. The decision factored in softening labour market data amid a faster disinflation rate.
 
Same September, China introduced a rash of economic stimulus, including interest rate cut of 20bp, a cut to outstanding mortgage rates, a liquidity injection of up to 500 billion yuan to support the equity market, a new PBoC swap facility to further support the market, and a $142 billion capital injection into major domestic banks. The Chinese economy is known to be grappling with deep-rooted structural issues, debt deflation, and demographic issues.

The European Central Bank, Bank of Japan, and Bank of Canada are anticipated to ease monetary policy amid slower economic growth momentum and slower inflation.