Big central bank rate cuts slow, tariffs and politics in focus

The pace of global rate cuts is slowing as the European Central Bank nears the end of its easing cycle, the U.S. Federal Reserve stays cautious about tariff-driven inflation and investors watch to see whether Britain speeds up from here. The Fed struck a hawkish tone on Wednesday alongside holding rates steady, an approach that lifted the dollar and assuaged fears that President Donald Trump's intense pressure on chair Jerome Powell has eroded central bank independence. The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here. Advertisement · Scroll to continue Report This Ad Here's where 10 big central banks stand: Change in policy rates by 10 major developed central banks since March 2024 Change in policy rates by 10 major developed central banks since March 2024 1/ SWITZERLAND Bets that the Swiss National Bank will use negative interest rates to tackle the seemingly unstoppable rise of the safe haven franc have faded after it kept benchmark borrowing costs on hold at 0% in June. Traders regard another pause in September as near certain and speculate that the SNB has started intervening to weaken the franc. A line chart comparing inflation metrics over the past five years. A line chart comparing inflation metrics over the past five years. 2/ CANADA The Bank of Canada held its key policy rate at 2.75% for the third straight meeting on Wednesday, citing lower risks of a severe and escalating global trade war. But it declined to give detailed economic forecasts, citing uncertainty around U.S. trade policy, and said that if the economy weakened further it could cut rates again. Advertisement · Scroll to continue Report This Ad The BoC has eased rates by 225 basis points since June 2024, and markets see a reasonable chance of one more cut by year end. A line chart comparing inflation metrics over the past five years. A line chart comparing inflation metrics over the past five years. 3/ SWEDEN Ahead of Sweden's disappointing second quarter GDP data on Tuesday, the Riksbank cut its key rate to 2% last month and said policy could be eased again this year if inflation remains tame and growth remains weak. A line chart comparing inflation metrics over the past five years. A line chart comparing inflation metrics over the past five years. 4/ NEW ZEALAND The Reserve Bank of New Zealand, which has cut rates by 225 bps already this cycle, held borrowing costs steady earlier this month but said it expected to loosen monetary policy if price pressures continued to ease as expected.