A cyclist passes the Federal Reserve headquarters in Washington. — Reuters
THE final flurry of global monetary policy decisions for 2025 is likely to showcase how the easing cycle in advanced economies either lacks fresh impetus or is effectively over.
A year that dawned with the prospect of successive, if limited, rate cuts across the rich world is set to end with that momentum losing steam.
Instead, central bankers are stepping back to assess how their progress so far is impacting growth and inflation.
The US Federal Reserve’s (Fed) cloudy outlook for any further reductions following last Wednesday’s quarter-point cut is one part of that backdrop.
Another is that the global economy has apparently weathered US President Donald Trump’s tariff onslaught better than expected.
Among multiple decisions due this Thursday and Friday, the Bank of England’s (BoE) probable reduction in borrowing costs may draw the most scrutiny.
It’s an outcome that investors will look to for clues on whether it could be one of the BoE’s final moves of the cycle.
The European Central Bank, meanwhile, is set to present higher growth forecasts that may cement the tentative rate hold officials have enforced since May, with questions to president Christine Lagarde likely to focus on how soon a pivot to tightening could transpire.
Policymakers in four other European countries are expected to keep borrowing costs steady. The Bank of Japan, meanwhile, is widely expected to hike.
“ECBspeak Index, our proprietary central bank sentiment indicator, suggests the hawks have the momentum and their preferred outcome for the December meeting – no change in interest rates – will surely be delivered,” said Bloomberg economists David Powell and Simona Delle Chiaie.
In comparison to the advanced-economy narrative of a potentially shifting tide for policy, the direction of travel elsewhere is less clear. Several other central banks, from Mexico to Thailand, are set to extend easing cycles in the coming week.
Elsewhere, multiple data releases in China, inflation figures from the United Kingdom to Canada, jobs numbers in the United States, and growth figures in Brazil will be among the highlights.
A deluge of delayed data will offer traders and policymakers a much-anticipated snapshot of the US labour market and broader economy.
Following the Fed’s latest decision to lower interest rates, the November jobs report – due today – will begin to shape the 2026 outlook for borrowing costs.
Economists project a 50,000 increase in payrolls and a 4.5% unemployment rate, consistent with a sluggish, but not rapidly deteriorating, labour market.
The report will also include an estimate of October payrolls – figures that were delayed by the federal government shutdown.
However, the Bureau of Labour Statistics (BLS) said it was unable to conduct its survey of households for the month, and as a result won’t publish an October unemployment rate.
The fallout from the longest-ever government shutdown extended to another high-profile economic indicator: the consumer price index (CPI).
The November CPI report on Thursday will have no monthly changes for most of the price categories, including the overall CPI and core measure that excludes food and energy.
That’s because the BLS said it was unable to collect much of the October price information. November data collection was also delayed by the government shutdown, adding another caveat to the widely-watched figures.
The United States will also issue figures on October retail sales. Excluding autos and petrol, economists forecast an acceleration in outlays that would suggest solid consumer demand at the start of the fourth quarter.
New York Fed president John Williams, Atlanta Fed president Raphael Bostic and Fed governors Stephen Miran and Christopher Waller are among US central bank speakers scheduled to appear this week.
Meanwhile, National Economic Council head Kevin Hassett – seen as the frontrunner to succeed Jerome Powell as Fed chair – told CBS’ Face the Nation that he’d consider Trump’s policy opinions if picked to lead the institution.
The president “has very strong and well-founded views about what we ought to do,” Hassett said.
“But in the end, the job of the Fed is to be independent and to work with the group of people that are on the board of governors, the Federal Open Market Committee, to drive a group consensus on where interest rates should be.” — Bloomberg
Craig Stirling writes for Bloomberg. The views expressed here are the writer’s own.
