World Economy

Central Banks Pivot Away from Rate Hikes as Inflation Pressures Ease Globally

Major central banks are retreating from aggressive monetary tightening as inflation moderates across key economies. The policy outlook is shifting toward potential rate cuts in coming months.

Turkey's central bank is considering an interest rate reduction following continued disinflation in September, signaling relief for liquidity pressures tied to domestic financial stress. The shift mirrors moves by the Federal Reserve, which traders now see as unlikely to raise rates in October following softer-than-expected jobs data that pointed to cooling labor market momentum.

The European Central Bank is similarly recalibrating its approach, with policymakers acknowledging uncertainty in the inflation trajectory. Regional turbulence in financial markets has further tempered the urgency for additional hikes that appeared more certain just weeks earlier.

Central banks remain cautious, however, noting that inflation's path remains unpredictable and subject to geopolitical developments.