Markets pondering life after easing

The global interest-rate cutting cycle has likely peaked. The question now is when, or if, today’s high-flying markets will start to feel the pinch.

- JAMIE MCGEEVER

Remarkably, there have been more rate cuts around the world in the last two years than during the 2007-09 global financial crisis, according to Bank of America. Although that’s the number of cuts and not the magnitude of easing, it reflects the scale of the historic inflation-fighting rate increases in 2022-23.

But the cycle now appears to have turned. This doesn’t mean easing has stopped. Some central banks are still expected to cut further, but the number of cumulative cuts will decline.

On the face of it, the end of super-easy monetary policy should mean less accommodative financial conditions ahead.