Central Banks Rates Under Microscope in Next Two Weeks

This week we have several large US corporates reporting on earnings as well as US GDP figures.  This may set the theme for the Federal Reserve’s meeting next week.

This week

• The European Central Bank (ECB) is due to make an interest rate decision in Europe on Thursday.  The current ECB rate is 4% pa (its highest since the Euro launched in 1999) when the ECB committee said it would ‘keep their options open’ meaning the decision on Thursday is uncertain.
• The Bank of Canada will also decide this week (current rates 5.0% pa) and is expected to hold rates.

Next week

• The Federal Reserve’s decision on US interest rates (currently within a range of 5.25% - 5.50% pa) is on Wednesday 1^st November and forecast to hold or increased marginally by 0.1% pa.
• The Bank of England’s monetary policy committee meets the day after on 2^nd November and we expect an increase from 5.25% pa to 5.50% pa next week or if not, on 14^th December 2023.

Comment

Not long now we hope, we expect central bank rates to starting falling in 2024 with rates at 4.0% pa by the end of 2024.  Gone are the days of low-low rates as we head back to normality (we hope) on inflation and interest rates.  Normal prime mortgage rates will then hover around the 4.5% to 5.0% pa mark.