Our latest views on the major central banks

ING expects the major central banks to follow increasingly divergent paths through 2027 as inflation, growth and energy shocks affect each economy differently.

• The Federal Reserve is expected to deliver one more hike at the December FOMC meeting, followed by a prolonged pause as interest-sensitive activity cools and wage pressures remain benign.
• ING sees the ECB raising rates once more in December, then keeping policy unchanged through 2027 if energy prices fall and weak final demand limits companies' pricing power. A cut could come late in the year.
• The Bank of England may hike in December if the energy crisis worsens, with February viewed as the base case. Inflation is expected to exceed 4%, while benign food inflation, lower energy-intensive inflation and a cooler labour market limit second-round effects.
• The BoE's April CPI data, released in May, should determine whether policymakers can turn more dovish by summer and potentially cut rates before the end of 2027.
• The Bank of Japan is expected to raise rates by 25 basis points in December and March after reaching its 2% inflation target in October, while ING sees 1.75% as sufficient before government measures reduce headline inflation from April.
• The People's Bank of China should remain in easing mode as inflation is likely to end the year below 1%, domestic activity has weakened to its lowest levels since the pandemic, and youth unemployment remains high. ING expects a 10 basis point rate cut in mid-2027.

Takeaway: The policy outlook points to one more US hike, conditional tightening in the UK and Japan, possible ECB easing late in 2027, and continued Chinese support, with energy prices and second-round inflation effects as key risks.