Interest Rates – Market-Implied Probability of Negative Policy Rate 1 Year Ahead Negative interest rates in the US and the UK ahead? Option markets point to elevated probabilities. Image: Goldman Sachs Global Investment Research
Central Banks Policy Rates The Fed has more room than most other central banks in developed economies to cut further. Image: Financial Times
Historical Correlations of Asset Price Returns to Central Bank Net Cuts in Policy Rates The correlation between assets price returns and central bank rate cuts has been higher after the Great Financial Crisis. Image: BofA Merrill Lynch Global Research
Central Banks Main Policy Rate and Balance Sheet – Advanced Economies vs. Emerging Markets Many central banks are running low on ammunition to fight the next downturn, after a decade of cheap money. Image: BofA Merrill Lynch Global Research
U.S. Dollar and Percentage of Developed Countries with Policy Rates below U.S. The chart suggests that the percentage of developed countries with policy rates below U.S., is a support for the U.S. dollar. Image: BofA Merrill Lynch
Central Banks Hiking/Cutting Policy Rate A race to the bottom in global interest rates? Central Banks policy rates have started to decline again. Image: BofA Merrill Lynch Global Research
Developed Country Policy Rates Above the United States Look for the mistake: the number of countries with a policy rate above the U.S. is zero. Image: Bianco Research
G4 Central Banks Monetary Policy Rate If the trend in G4 central banks monetary policy rates continues, this chart suggests that we could see -4% in 2030. Image: Nordea and Macrobond
GDP Weighted Global Central Bank Policy Rate vs. Global PMI This chart suggests that global policy rates are too tight compared to global PMI in contraction mode. Image: Pervalle Global
Fed Monetary Policy Rate Change over 6 Months Prices in (Futures) vs. Actual Actually, the Fed decides when to raise rates, but the market decides when to cut rates. This chart shows that rate expectations are highly predictive six months in advance. You may also like “Markets Have Accurately Priced in Cuts before Easing Cycles…