The world’s central banks are carefully recalibrating their monetary policies, with expectations for rate cuts dominating the outlook for most major economies. Here’s a breakdown of the expected rate changes by the end of 2025, as well as notable probabilities tied to upcoming meetings.

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Rate Cuts by Year-End 2025

Federal Reserve (Fed)
The Fed is expected to cut rates by 22 basis points (bps) by the end of 2024, with an 87% probability of a rate cut at the next meeting. By 2025, the cumulative cut is projected to reach 88 bps, signaling a significant easing in monetary policy.

European Central Bank (ECB)
The ECB is forecasted to reduce rates by 29 bps this year, supported by an 83% probability of a 25 bps rate cut in the upcoming meeting. By the end of 2025, the total rate cuts could reach 148 bps, underscoring a pivot toward more accommodative policy.

Bank of England (BoE)
The BoE is likely to implement only a 3 bps cut by year-end, with a 90% probability of no change in the upcoming meeting. For 2025, expectations point to more substantial reductions amounting to 76 bps.

Bank of Canada (BoC)
Canada’s central bank is set to deliver 47 bps of cuts in 2024, with an 88% likelihood of a 25 bps cut in the near term. By 2025, this figure could increase to 118 bps, reflecting continued softening.

Reserve Bank of Australia (RBA)
For the RBA, the near-term outlook is relatively stable, with only 2 bps of cuts expected this year and a 90% probability of no change in the upcoming meeting. However, by 2025, the cuts are projected to deepen to 70 bps.

Reserve Bank of New Zealand (RBNZ)
The RBNZ is expected to cut rates by 36 bps this year, with a 55% probability of a 25 bps cut soon. By the end of 2025, total rate cuts could hit 100 bps.

Swiss National Bank (SNB)
The SNB is forecasted to ease by 40 bps in 2024, with a 60% probability of a 50 bps cut in the next meeting. Cuts are expected to accumulate to 90 bps by 2025.

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Rate Hikes by Year-End 2025

While rate cuts dominate the outlook, there is one exception:

Bank of Japan (BoJ)
The BoJ is projected to hike rates modestly, by 7 bps in 2024. There’s a 71% probability of no change at the next meeting, but cumulative hikes could reach 45 bps by the end of 2025. This signals a potential shift away from Japan’s historically ultra-loose monetary stance.

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Key Takeaways

• Most major central banks are gearing up for rate cuts, reflecting expectations of slowing economic growth or subdued inflationary pressures.
• The ECB and Fed are projected to lead the easing trend with substantial cuts by 2025.
• In contrast, the BoJ may maintain its divergence with gradual rate hikes, emphasizing its unique economic context.

These projections underline the nuanced approaches central banks are taking to navigate global economic uncertainties, with distinct strategies shaping regional financial markets.