Thought hiking rates was tough? Wait for the pause

Central banks are unlikely to be categoric when they suspend rate hikes in coming months. It may only become clear in retrospect that the hold button has been pressed. — Reuters

IF breaking up is hard to do, explaining why you want to take a breather comes a close second. Unless confident it’s time for something new, the temptation to equivocate is considerable. In monetary affairs, figuring out what an interest-rate pause looks like – and the degree of conviction behind it – can be a perilous exercise.

Calculating when to take five carries no shortage of risks. Central banks are unlikely to be categoric when they suspend rate hikes in coming months. It may only become clear in retrospect that the hold button has been pressed.