Central banks' prospective action plan for 2024

Welcoming everyone to a new year, central banks across the globe are looking forward to doing a lot more to bring the lives of the people to a comfortable phase. With many of the central banks having been very vocal in bringing inflation down, there were turbulent responses from the markets, which invariably settled down. An interesting point to note here the markets and the central bank expectations invariably were said to be on two different spectrums for the most part in 2023, and it remained difficult for analysts to predict the next move by the central banks. 

United States Federal Reserve coming with an announcement of making at least 75 basis point cuts this year compared to their previous claims of going for higher rate cuts for this year. From what is analysed. the economic condition of the nations' inflation is on a steady and progressive decline, it would take necessary steps to make the economy stable in terms of inflation and other economic parameters. This is said to be reflected in the tone of the central bank governor in his statement earlier last month. From what we all need to understand, the war against inflation is said to be still ongoing and it is an ongoing fight to keep it in a stable state.

Following this are the moves of the European central banks, which are said to be moving in for rate cuts to be materialized at least by mid of this year. Their governor's statement mostly states that of the fact that a move on the rate cut is likely based on the data presented to them in the coming months before they begin their rate-cutting phase. 

As far as India is concerned, it's mostly to go in for their rate-cutting cycle by mid of this year. Considering the inflation of our country, it is said to have cooled down. But the chances of it peaking is also a concern. So, there is an anticipation that the rate-cutting phase might begin sometime in Q3 of this year. 

With Japan remaining on the negative interest rate trend, remaining an outlier from all the economies across the globe, it would continue to be the same in 2024 as well. We can anticipate a change in the trend in the years ahead. Despite all this, the economy is performing at a decent pace, with the services sector performing relatively well.

This year is for the central banks, on the news, and for the analysts forecasting their next moves. It may be predictable moves or surprise moves based on how the economy fares over the year. Let us all wish ourselves a safe year ahead, and may prosperity and goodwill prevail in our world economy.