When central bankers give guidance on likely interest rates changes in the next month or two, it’s probably best to believe them. But experience shows that banks’ own interest rate forecasts are very unreliable beyond three to six months in the future. While we agree broadly with the US Fed’s forecast for this year, we doubt that it will cut interest rates as far as it anticipates in 2026. Meanwhile, both Norges Bank and the RBNZ are likely to cut rates faster or further than their own forecasts imply.
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