Central bank matters

Over the next two days, the Bank of Japan, the Federal Reserve, and the Bank of England will convene to determine their monetary policies. According to Bloomberg's World Interest Rates Probabilities function, which calculates implied policy rate probabilities from futures and swap prices, financial markets anticipate rate cuts this year for all except Japan. A key investment theme for this quarter is that central banks have reached the end of their rate hike cycles, and our client portfolios are strategically positioned in anticipation. However, the pace of these rate cuts varies significantly across developed economies and is much slower than projected at the start of 2024.