Fitch Ratings: Global Central Banks May Ramp Up Easing Measures, but the Fed May Have to Wait Until Q4

On April 17th, Fitch Ratings indicated that the unanticipated weakening of the US dollar has provided more leeway for global central banks to adopt easing policies. Fitch currently anticipates that the European Central Bank and emerging markets will further reduce interest rates. With the slowdown of the world economy, the decline in commodity prices, including oil, will also prompt countries outside the US to expedite monetary easing. This will be in contrast to the Fed, as Fitch still expects the Fed to wait until the fourth quarter to cut rates. The report stated that despite the deteriorating outlook for US economic growth, the inflation outlook restricts the Fed's capacity to ease policy. Fitch anticipates that the escalation of tariffs will drive the US inflation rate to 4.3% by the end of the year, which is an increase from the previous forecast of 3.6%. (FX168)