Major central banks announced their monetary policy decisions this week and all of them decided to keep rates unchanged, seemingly suggesting that victory over inflation may be close at hand.
The European Central Bank (ECB) kept rates steady for the second time in a row on Thursday while expressing belief that the main goal of reaching a 2% inflation target will be achieved. On the other hand, The United States Federal Reserve's Federal Open Market Committee (FOMC) left the key interest rate unchanged for the third consecutive time, between 5.25% and 5.50%, highlighting a slowdown in inflation. The Bank of England's Monetary Policy Committee voted to maintain its primary interest rate at 5.25%, remaining at its highest level in 15 years.
During their press conferences, central bank officials gave more or less similar remarks. ECB's President Christine Lagarde underlined that rate cuts were not a topic of discussion at all among policymakers. She explained that the bank should not lower its guard in its battle to restore price stability and noted that geopolitical pressures raise the risk of higher inflation. On the other hand, United States Federal Reserve Chair Jerome Powell said that policymakers think they have done enough with rates and added that they generally expect potential interest rate cuts to become a "topic for us looking ahead."
And while both Eurozone and US inflation eased in November by 2.4% and 3.1% respectively, monetary leaders agree that future data should be watched closely, noting that the central bank is "data-dependent, not time-dependent."
