Hikes This Year, Rate Cuts Next Year: Embrace What Lies Ahead

According to Bloomberg Economics, the new period of higher interest rates globally may last only until early 2024. Their analysis shows world rates starting a swift decline in Q1 2024.

• The shift to rate cuts will take slightly longer for advanced economies, but they are also expected to synchronize downward.
• The analysis sees central banks like the Fed and ECB cutting rates by the middle of 2024 after raising them to curb high inflation.
• The outlook foresees an economic slowdown and falling inflation, allowing central banks to switch from rate hikes to cuts.
• Bloomberg Economics' aggregate gauge of global rates is projected to begin a sharp drop in Q1 2024 after the period of higher rates.
• The analysis indicates that the higher-for-longer period of rising rates will be relatively short before central banks pivot to easing policy again amid slowing growth.

Reference: https://www.bloomberg.com/news/articles/2023-10-08/rate-cliff-awaits-global-economy-after-higher-for-longer-plateau