Markets remain of the view in the aftermath of the past week’s Fed and ECB policy meetings - which saw them both raise rates by 25bps - that the rate hiking cycles in the US and Eurozone have either drawn to a close or are very close to the end.
It is noteworthy that both central banks are no longer providing guidance for markets on the near-term path for interest rates, and instead have adopted a data-dependent approach to future policy decisions.
This has not been the case in the first half of 2023.
Meantime, markets are going some way towards pricing in a further 25bps hike from the ECB, notwithstanding the weakness in activity since last autumn.
