No rush, no fuss – central banks are in control.

Officials from the Federal Reserve and the European Central Bank (ECB) have recently made statements dampening expectations of interest rate cuts in the near future. In the US, despite market expectations, officials do not see a reason to cut rates quickly given the strong state of the economy. In the Eurozone, the ECB is uncertain about the inflation outlook, particularly due to slow wage growth. Both central banks want to be cautious when it comes to rate cuts, as they don’t want to risk triggering inflation. However, both are still considering reducing rates this year. Officials have indicated that rate cuts will be gradual and measured. This news has caused market pricing to adjust and be less bullish.