Rate cuts by year-end
- Fed: 71 bps (92% probability of rate cut at the upcoming meeting; the rest for a 50 bps cut)
2026: 145 bps
- ECB: 4 bps (97% probability of no change at the upcoming meeting)
2026: 10 bps
- BoE: 9 bps (98% probability of no change at the upcoming meeting)
2026: 42 bps
- BoC: 43 bps (90% probability of rate cut at the upcoming meeting)
2026: 59 bps
- RBA: 30 bps (78% probability of no change at the upcoming meeting)
2026: 48 bps
- RBNZ: 38 bps (82% probability of rate cut at the upcoming meeting)
2026: 48 bps
- SNB: 3 bps (94% probability of no change at the upcoming meeting)
2026: 6 bps
Rate hikes by year-end
- BoJ: 16 bps (96% probability of no change at the upcoming meeting)
2026: 50 bps
*The 2026 pricing reflects the cumulative easing expected by the end of 2026, not how much easing is expected in 2026 alone.
The most notable moves this week happened on the US side of course as the dovish expectations for the Fed solidified after the soft PPI, the in-line CPI and the weak initial jobless claims.
The market might be underpricing the probabilities for a 50 bps cut at next week's meeting, but anyway there is now strong consensus of 75 bps of easing by year-end.
We've also got a slightly more hawkish repricing for the ECB as President Lagarde yesterday confirmed that the cutting cycle was over and they would need strong reasons to cut further.
Overall, the changes haven't been significant because the market might be cautious in pricing more without strong reasons given that rate cuts could improve economic activity and eventually keep inflation higher for longer or even cause further acceleration.
