RBA Unlikely to Cut Interest Rates in 2026 as Inflation Pressures Persist, Says Westpac 
Asian Stocks Slide as AI Spending Fears and Global Central Bank Decisions Weigh on Markets 
Hong Kong Cuts Base Rate as HKMA Follows U.S. Federal Reserve Move 
Chinese Robotaxi Stocks Rally as Tesla Boosts Autonomous Driving Optimism 
U.S. Dollar Steadies Near October Lows as Rate Cut Expectations Keep Markets on Edge 
Brazil Holds Selic Rate at 15% as Inflation Expectations Stay Elevated 
Singapore Growth Outlook Brightens for 2025 as Economists Flag AI and Geopolitical Risks 
BoE Set to Cut Rates as UK Inflation Slows, but Further Easing Likely Limited 
Fed Meeting Sparks Division as Markets Brace for Possible Rate Cut 
Inflation expectations are soaring across the developed world. After the United Kingdom opted out of the European Union in the June referendum, exchange rate declined sharply and gave rise to the inflation expectations; consumer inflation expectation has jumped to 2.75 percent in the UK for the year 2017. While there has been no Brexit in the Eurozone or in the United States, rising commodity prices are giving rise to the concerns and the effects of easy money seem to be kicking in.
In the United States, 5-year 5-year (5y-5y) forward inflation expectations have reached to 1.97 percent in November. That is the highest level since August last year. Similarly, in Eurozone, European Central Bank’s (ECB) preferred gauge 5y-5y forward inflation expectations have reached more than 1.5 percent this month, which is the highest level in eight months.
Concerns have already started surfacing with regard to central bank’s stimulus measures. The market is preparing for a rate hike from the US Federal Reserve in December and lower stimulus from the ECB, when the current measures of bond buying expire in March next year.
