Nine of the ten biggest central banks provided strong monetary easing in 2025, lowering rates by a total of 850 basis points across 32 actions—the most notable worldwide loosening since 2009. This broad change mirrored declining inflation, weak labor mark

Nine of the ten biggest central banks provided strong monetary easing in 2025, lowering rates by a total of 850 basis points across 32 actions—the most notable worldwide loosening since 2009. This broad change mirrored declining inflation, weak labor markets, and the requirement to foster growth in the face of persistent post-pandemic problems. Driven by sustained inflation and increasing salaries, the Bank of Japan was the only outlier, raising rates twice for a total of 50 basis points to 0.75%, its highest level in three decades.

With three 25-basis-point cuts in September, October, and December, the Federal Reserve led significant advanced economy easing, bringing the policy rate to 3.50-3.75% and stopped quantitative tightening. Starting in June, the European Central Bank reduced rates by 100 basis points in a series of four 25 bp steps to support eurozone growth as inflation subsided, whereas the Bank of England implemented modest decreases from high levels but paused late in the year amid conflicting opinions and continuous gilt sales.

Emerging-market central banks were even more aggressive: the Reserve Bank of India lowered rates by 175 basis points in four stages to 5.25% to maintain strong GDP growth; the People's Bank of China paired small 20–30 bp rate cuts with 100 bp reserve requirement reductions for stimulus; the Reserve Bank of New Zealand issued 200 bp reductions to 2.25%; and Turkey's central bank carried out a sizable 950 bp drop to 38% as inflation at last subsided.