Cenbanks march to different beats

To cut or wait?

- Harsha Jethmalani

"To each their own" seems like a mantra for global central banks amid the economic gloom. Last week, the US Federal Reserve kept policy rates unchanged. The move was largely anticipated, but Chairman Jerome Powell's hawkish tone indicated that rates would remain unchanged until more clarity emerges on the impact of tariffs.

The 90-day US pause on bilateral tariffs ends on July 9. Renewed trade restrictions could push inflation higher in many economies, hurting real incomes and business confidence. The Israel-Iran conflict, now joined by the US, has added another layer of uncertainty. The geopolitical risk has pushed global crude oil prices higher, which is detrimental for many emerging market (EM) economies that import oil.