As global economic and political uncertainty continues to rise, central banks in developed markets are becoming more cautious regarding future interest rate cuts. While some banks have already lowered rates, others are evaluating their next steps carefully to ensure economic stability.

1. Switzerland

The Swiss National Bank (SNB) reduced its key interest rate by 25 basis points (bps) to 0.25% this week, marking its fifth consecutive rate cut since beginning the easing cycle from 1.75% a year ago. Although markets expect no further cuts, the SNB has not ruled out the possibility of returning to negative interest rates if economic conditions demand it.

2. Canada

The Bank of Canada (BoC) also cut its interest rate by 25 bps to 2.75% last week, its seventh consecutive reduction. However, BoC officials emphasized a cautious approach to any future cuts due to concerns over inflation and weaker economic growth. The risk of a recession, potentially sparked by trade tariffs, is likely to keep the BoC in a continued easing mode, with markets anticipating two more cuts by the end of the year.

3. Sweden

Sweden's central bank, the Riksbank, decided to leave its key interest rate unchanged at 2.25%. The Riksbank had already cut rates from 4% in an attempt to support its sluggish economy, but with inflation still above its target, policymakers indicated that no further cuts are expected for the time being.

4. New Zealand

The Reserve Bank of New Zealand (RBNZ) made a significant rate cut last month, reducing the official cash rate by 50 bps to 3.75%. This was part of an ongoing easing cycle, with rates having already been slashed by 175 bps over the past seven months. However, following the resignation of Governor Adrian Orr, market expectations are that the RBNZ may cut rates further in the near future, although this will largely depend on economic conditions.

5. Euro Zone

The European Central Bank (ECB) also reduced rates earlier this month, bringing the rate to 2.5%, its sixth cut since June. While the ECB has warned of rising uncertainty, including the potential for higher inflation due to global trade tensions and increased defense spending, there is a growing expectation that the bank may pause any further rate cuts in April, as policymakers assess the economic landscape.

6. United States

The Federal Reserve, which kept interest rates unchanged this week, has indicated that it plans to implement two additional rate cuts this year. However, the Fed has expressed concerns over unusually high levels of economic uncertainty, particularly in light of President Trump's trade policies, which have led to slower growth and higher inflation. While markets have priced in two rate cuts, some expect a third cut could be on the horizon.

7. Britain

The Bank of England (BoE) held its key rate steady at 4.5% this week. Although the BoE expects rates to decline gradually, the central bank has remained cautious, closely monitoring both global and domestic economic developments. Inflation remains above the BoE’s 2% target, and markets expect at least two more 25 bps rate cuts by the end of the year.

8. Australia

The Reserve Bank of Australia (RBA) reduced interest rates in February for the first time this cycle, primarily to prevent an overly tight policy. However, the strong labor market has made the RBA more cautious, with its decision to cut rates having been a finely balanced one. Markets predict two more rate cuts, but the RBA has warned that this may be too aggressive.

9. Norway

The Norges Bank in Norway has kept rates stable since late 2023. While Governor Øystein Olsen has suggested that it may be time to consider easing monetary policy, market expectations suggest that a rate cut is unlikely until at least June. The central bank’s upcoming meeting on March 27 will provide updated guidance on future rate decisions.

10. Japan

In a sharp contrast to its global counterparts, the Bank of Japan (BoJ) is still in a rate-hiking cycle. However, like other central banks, it is proceeding with caution, keeping rates steady this week. The BoJ's focus on domestic wage growth and inflation suggests that further tightening may be in the works, with markets anticipating at least one 25 bps increase by the end of the year.