Global Rate Cuts Surge: A Sea Change Looms

Central banks worldwide have implemented sweeping interest rate cuts in 2025, marking the most significant easing since the financial crisis. This reversal from previous years' inflation-combatting hikes forecasts potential rate increases in 2026. Notably, emerging markets contributed with extensive cuts, suggesting a shift in global economic strategies.

In a move reminiscent of post-financial crisis strategies, major central banks implemented sweeping interest rate cuts in 2025, marking the fastest and most expansive reductions in over a decade. The U.S. Federal Reserve, alongside other significant banks like those in Europe and Australia, spearheaded the effort.

A stark shift from earlier years, when interest rates were hiked to combat soaring inflation triggered by global events, the current climate reflects a pivot back to lower rates. While the U.S. and the UK have continued reductions, nations like Japan have stood out with increased rates.

The coming year, 2026, anticipates potential rate hikes, hinted by changing tones among central banks, particularly in Canada and Australia. Emerging markets contribute to this complex global financial landscape, continuing with significant rate reductions albeit at a slower pace.

(With inputs from agencies.)