To date, 10 developed economies have raised rates by a combined 3,515 basis points (bps) in this cycle.
Japan is the holdout dove.
Here's a look at where policymakers stand, from hawkish to dovish.
1) UNITED STATES
The Fed raised rates by a quarter point to 5.00-5.25% last Wednesday, continuing its most aggressive series of hikes since the 1980s.
The U.S. central bank offered markets some succour, dropping from its policy statement language that it "anticipates" further rate increases.
Fed chief Jerome Powell said inflation remains the chief concern, and that it is therefore too soon to say with certainty that the rate-hike cycle is over.
2) NEW ZEALAND
The Reserve Bank of New Zealand shocked markets in April by unexpectedly raising its cash rate by 50 bps to 5.25%, the highest in over 14 years. Not one economist polled by Reuters had predicted the move.
The central bank said inflation was still "too high" with employment beyond "maximum sustainable levels". Analysts revised their forecasts for the peak in interest rates up to 5.5%.
3) CANADA The Bank of Canada in March became the first major central bank to halt monetary tightening during this cycle.
The BoC's key overnight rate remains at 4.50%, with the aim to hold it there as long as inflation drops to 3% at about mid-year.
Market participants believe there'll be no change until next
year, according to a central bank survey released on April 24.
4) BRITAIN
The Bank of England raised its key interest rate by 25 basis points to 4.5% as expected on Thursday, seeking to curb the highest inflation in any major economy. The central bank said it no longer expects a recession, but anticipates inflation will take longer to fall than it had hoped, mostly due to unexpectedly big and persistent rises in food prices.
5) AUSTRALIA Australia's central bank confounded expectations of a pause with a 25 bps hike in May. The cash rate now stands at a 12-year high of 3.85% and the RBA said "some further tightening" may be required to ensure inflation returns to target in a "reasonable timeframe".
6) NORWAY
Norway's central bank raised its main interest rate by 25 bps last Thursday to 3.25%. It said another hike in June was likely – and that more could be needed if the currency stays weak. The Norwegian crown has had a terrible year, with the dollar up almost 9% against the currency in 2023. Meanwhile, inflation remains hot, with the core rate picking up to 6.3% in April.
7) EURO ZONE
The ECB raised its deposit rate by 25 bps last Thursday to 3.25%, its seventh successive hike but the smallest since it started lifting rates last summer. The central bank kept its options open on future moves as it continues fighting stubbornly high inflation in the euro zone.
President Christine Lagarde said while monetary policy is no doubt restrictive, it is not yet "sufficiently restrictive", noting that the "inflation outlook is too high and has been so for too long."
8) SWEDEN The Riksbank raised borrowing costs by 50 bps in April to 3.5% but said it was nearly finished with policy tightening, prompting a drop in the Swedish crown. Sweden's underlying rate of inflation stripping out energy prices eased to 8.9% in March but remains well above the central bank's 2% target.
While investors had previously expected rates to peak at 4%, the Riksbank suggested only one more 25 bps hike is likely.
9) SWITZERLAND The Swiss National Bank raised its main interest rate by 50 bps in March to 1.5%, saying UBS's emergency takeover of Credit Suisse had "put a halt" to the chance of a banking crisis. Swiss inflation cooled to 2.6% in April, from 3.4% in February, but remained above the SNB's target band for the 13th straight month. Traders expect a further 25 bp hike in June, market pricing suggests.
10) JAPAN
The Bank of Japan looks set to remain the world's most dovish central bank under new governor Kazuo Ueda.
At Ueda's first meeting in late April the BOJ maintained its ultra low rates and its yield curve control policy that caps interest rates on longer term government bonds.
The BOJ also announced a plan to review its past monetary policy moves but said this exercise will take one-and-a-half years.
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Fed hikes and opens door to pause RBNZ stuns market with bigger rate rise Bank of Canada holding off on hikes An unexpected rate hike Norges Bank continues hiking rates Norges Bank continues hiking
rates Riksbank says nearly done with hikes Riksbank says nearly done
with hikes SNB hints at further rate hikes ahead Ueda maintains ultra-low interest rates ECB eases the pace of interest rate hikes Bank of England raises rates for 12th time in a row The race to raise rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Samuel Indyk, Nell Mackenzie, Dhara Ranasinghe,
Alun John, Naomi Rovnick, Harry Robertson and Chiara Elisei;
Graphics by Vincent Flasseur, Sumanta Sen and Pasit
Kongkunakornkul and Riddhima Talwani; Editing by Catherine
Evans)
