Seven major central banks raised rates this month

During 2022, the world’s major central banks raised interest rates at the fastest pace and on the largest scale in two decades, in a battle without cDuring 2022, the world’s major central banks increased interest rates at the fastest pace fast and on the largest scale in two decades, in an all-out battle to contain rising global inflation. quarter to contain rising global inflation.

Central banks that oversee the 10 most traded currencies raised rates by a total of 2,700 basis points (bp) with 54 hikes in the past 12 months, according to Reuters calculations.

All major central banks except the Bank of Japan have raised rates this year, but Tokyo policymakers unsettled markets this month with a surprise adjustment to their target yield on debt. public, which encouraged speculation about a possible hike in the near future.

However, the 225 bp hikes by the Federal Reserve (Fed) in the last 12 months, and the possibility of more, are what have kept markets on edge, in a context of slowing growth.

“If you look at the tightening of monetary policy in the US, this is one of the sharpest in the last 20 years,” David Hauner, head of EMEA emerging markets cross-asset economics and strategy, told Reuters. at Bank of America.

“Normally, when you have such a sharp tightening of financial conditions, you basically have something more than a small recession, which now seems to be the general consensus,” Hauner explained.

On a monthly basis, the data showed that seven of the top 10 central banks raised their rates in December.

The Fed, the European Central Bank, the Bank of England, the Reserve Bank of Australia, the Norwegian Norges Bank, the Bank of Canada and the Swiss National Bank raised their reference rate by a cumulative 300 bp. This figure contrasts with the monthly maximum of 550 bp in September, although not all central banks meet monthly.