Rich World’s Rate-Cut Momentum Is Fading Away

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(Bloomberg) — The final flurry of global monetary policy decisions for 2025 is likely to showcase how the easing cycle in advanced economies either lacks fresh impetus or is effectively over. 

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A year that dawned with the prospect of successive, if limited, rate cuts across the rich world is set to end with that momentum losing steam. Instead, central bankers are stepping back to assess how their progress so far is impacting growth and inflation. 

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The Federal Reserve’s cloudy outlook for any further reductions following Wednesday’s quarter-point cut is one part of that backdrop. Another is that the global economy has apparently weathered US President Donald Trump’s tariff onslaught better than expected.  

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Among multiple decisions due on Thursday and Friday, the Bank of England’s probable reduction in borrowing costs may draw the most scrutiny. It’s an outcome that investors will look to for clues on whether it could be one of the BOE’s final moves of the cycle. 

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The European Central Bank, meanwhile, is set to present higher growth forecasts that may cement the tentative rate hold officials have enforced since May, with questions to President Christine Lagarde likely to focus on how soon a pivot to tightening could transpire.

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Policymakers in four other European countries are expected to keep borrowing costs steady. The Bank of Japan, meanwhile, is widely expected to hike. 

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What Bloomberg Economics Says:

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“Bloomberg Economics’ ECBspeak Index, our proprietary central bank sentiment indicator, suggests the hawks have the momentum and their preferred outcome for the December meeting — no change in interest rates — will surely be delivered.”

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—David Powell and Simona Delle Chiaie. For full analysis, click here

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In comparison to the advanced-economy narrative of a potentially shifting tide for policy, the direction of travel elsewhere is less clear. Several other central banks, from Mexico to Thailand, are set to extend easing cycles in the coming week.

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Elsewhere, multiple data releases in China, inflation figures from the UK to Canada, jobs numbers in the US, and growth figures in Brazil will be among the highlights. 

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Click here for what happened in the past week, and below is our wrap of what’s coming up in the global economy.

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US and Canada

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A deluge of delayed data will offer traders and policymakers a much-anticipated snapshot of the US labor market and broader economy.

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Following the Fed’s latest decision to lower interest rates, the November jobs report — due on Tuesday — will begin to shape the 2026 outlook for borrowing costs. 

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Economists project a 50,000 increase in payrolls and a 4.5% unemployment rate, consistent with a sluggish, but not rapidly deteriorating, labor market.

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The report will also include an estimate of October payrolls — figures that were delayed by the federal government shutdown. However, the Bureau of Labor Statistics said it was unable to conduct its survey of households for the month, and as a result won’t publish an October unemployment rate.