G-7 Central Banks Prepare for June with Global Rate Cuts and Slowing Inflation

Inflation-related releases across the Group of Seven countries are set to shape central bankers’ decisions on interest rates in June. As policymakers gather in Italy to discuss the global economy, key data releases from the US, UK, Canada, Japan, and the euro zone will provide crucial insights.

Canada will kick off the week with its inflation data, which could influence the likelihood of a rate cut at the upcoming meeting. The UK is expected to see a significant slowdown in consumer-price growth, potentially prompting the Bank of England to consider reducing borrowing costs.

Meanwhile, the European Central Bank will release wage numbers, essential for assessing underlying price dynamics. With expectations of a rate cut in June, policymakers will closely monitor the data for any signs of economic weakness.

In Japan, consumer-price growth is anticipated to weaken, but officials may still consider a rate hike given the sustained inflation levels. The divergence in rate outlooks between the G-7 countries will be a focal point of discussion at the upcoming meeting in Italy.

In the US, the Federal Reserve is expected to maintain its current stance on rates, with Chair Jerome Powell indicating a cautious approach due to lingering price pressures. Economic data releases in the US and Canada will provide further insights into consumer sentiment and spending patterns.

Across Asia, central banks in China, New Zealand, Indonesia, and South Korea are expected to hold rates steady, with potential cuts on the horizon. In Latin America, Chile and Paraguay are likely to continue their rate-cutting cycles, while Mexico grapples with stubbornly high inflation.

Overall, the upcoming data releases and central bank decisions will offer valuable clues about the global economic outlook and the direction of monetary policy in the coming months.