Global Central Banks Pause Rate Hikes in October Amid Persistent Inflation Concerns

Global central banks largely maintained interest rates in October following a series of rate hikes in September, as policymakers continued to grapple with persistent inflationary pressures. The Bank of Canada was the only central bank among those overseeing the world’s 10 most heavily traded currencies to raise rates during the month. Meanwhile, the US Federal Reserve, European Central Bank, Reserve Bank of New Zealand and Bank of Japan kept rates unchanged, while several other major central banks had no scheduled policy meetings.

The pause followed an active September, when six G10 central banks collectively raised interest rates by 150 basis points, marking the biggest monthly tightening push since June 2023. So far this year, G10 central banks have delivered 14 rate hikes, amounting to 350 basis points, without implementing any rate cuts. Rising oil prices, with Brent crude recording double-digit gains in both September and October, have further heightened concerns about renewed inflation. Economists warned that the pause does not necessarily signal the end of the tightening cycle, with future policy decisions likely to depend on inflation trends.

Emerging markets also witnessed relatively limited monetary policy action in October. Among 18 developing economies monitored by Reuters, India and the Philippines raised interest rates by a combined 75 basis points, while 10 central banks kept their benchmark rates unchanged. Turkey, meanwhile, resumed its monetary easing cycle after an eight-month pause, cutting rates by 100 basis points. Year-to-date, emerging market central banks have collectively delivered 675 basis points of rate hikes through 16 increases and 850 basis points of cuts through 25 reductions, highlighting the differing approaches adopted by policymakers amid evolving economic conditions.

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