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The end is near for policy easing among big central banks
Published by Global Banking & Finance Review®
Posted on November 6, 2025
4 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on November 6, 2025
4 min readLast updated: January 21, 2026
Central banks in major economies are nearing the end of their rate-cutting cycles, with some like the U.S. Fed and BoE having limited room for further easing.
By Naomi Rovnick and Alun John
LONDON (Reuters) -Central banks in big economies are nearing the end of their rate-cutting cycles, though some, like the U.S. Federal Reserve and Bank of England - which were more cautious earlier in the year - have scope to ease a little more.
Australia, Sweden and Norway all left rates unchanged this week, as did the BoE, albeit in a tight decision.
Here's where 10 major central banks stand after the latest round of meetings:
1/ SWITZERLAND
The Swiss National Bank has been on hold since it cut its key rate to 0% in June, and markets expect it to remain there for now.
Swiss inflation unexpectedly fell to 0.1% in October, government data showed this week, but analysts said this would not be enough to cause the SNB to cut rates into negative territory.
2/ CANADA
The Bank of Canada, battling an economic slowdown exacerbated by U.S. tariffs and the inflationary impact of the trade war, cut rates to a more than three-year low of 2.25% last week.
It too has eased policy more aggressively than many developed market peers, but is now sending strong signals that the easing ends here. Traders see a further cut this year or next as unlikely.
3/ SWEDEN
Sweden's Riksbank, another big mover, held its policy rate unchanged at 1.75% on Wednesday and said it expected to remain at this level "for some time to come" unless the outlook for inflation and growth shifts.
4/ NEW ZEALAND
The Reserve Bank of New Zealand cut rates by a punchy 50 basis points (bps) to 2.5% last month to bolster a frail economy.
Markets see a good chance of a further cut in late November, although inflation sitting at the top of the RBNZ's 1-3% target band could be a complication.
5/ EURO ZONE
The ECB last week held its main deposit rate at 2% for a third straight meeting, flagging the bloc's economic resilience.
Traders see this ECB easing cycle as all but over, pricing in less than a 50% chance of further easing by July 2026.
6/ UNITED STATES
The Fed last week executed a widely flagged 25 bps cut but pushed back against market bets for more by warning that data gaps caused by the U.S. government shutdown were fogging up its forecasting lens.
The rate cut drew dissent from two policymakers, with Stephen Miran calling for a deeper reduction and Kansas City Fed President Jeffrey Schmid favouring no cut given above-target inflation.
Strong data this week has further trimmed bets and traders price in a roughly 60% probability of a 25 bps December cut, down from 84% ahead of the Fed meeting.
7/ BRITAIN
Bank of England rate setters on Thursday voted 5-4 to leave rates unchanged at 4%, leaving the door open for a cut in December that would follow the government's all-important November 26 budget announcement.
The BoE said it saw a bigger risk of weaker demand in the economy while the chance of inflation getting stuck too high had diminished.
8/ AUSTRALIA
Australia's central bank on Tuesday left its cash rate steady as expected at 3.60%, saying it was cautious about easing further given higher inflation, firmer consumer demand and a revival in the housing market.
That was no surprise given uncomfortably hot third-quarter inflation, but markets now see little chance of further easing until well into 2026.
RBA governor Michele Bullock said it is possible there will be no more rate cuts.
9/ NORWAY
The Norges Bank kept its key rate on hold at 4% on Thursday as it tries to keep the pressure on inflation above its official target.
It has cut by just 50 bps in total this cycle, though policymakers say some further easing is expected next year.
10/ JAPAN
The Bank of Japan, the sole central bank in hiking mode, kept rates steady last week but repeated its pledge to keep increasing borrowing costs if the economy moves as it projects, shifting investor focus to December's meeting.
The yen weakened after the announcement.
U.S. Treasury Secretary Scott Bessent has called for speedier BOJ rate hikes to avoid weakening the currency too much.
(Reporting by Naomi Rovnick and Alun John, editing by Dhara Ranasinghe and Hugh Lawson)
A central bank is a financial institution that manages a country's currency, money supply, and interest rates, often overseeing the banking system and implementing monetary policy.
Monetary policy refers to the actions taken by a central bank to control the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation and stabilizing the currency.
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the amount borrowed or saved, typically set by central banks.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power, and is often measured by the Consumer Price Index (CPI).
Economic growth is the increase in the production of goods and services in an economy over a period, typically measured by the rise in Gross Domestic Product (GDP).
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