The market tends to believe that the rate-cutting cycle of European central banks is coming to an end.

PANews, December 17 – Traders are increasingly inclined to believe that the rate-cutting cycle by European central banks has largely come to an end. Money markets indicate that the European Central Bank, the Swedish central bank, and the Norwegian central bank are expected to keep interest rates unchanged at their meetings tomorrow and maintain stable rates through the end of 2026. Even for the Bank of England, which is expected to cut rates on Thursday, the market fully anticipates only one more rate cut next year, despite Wednesday’s softer inflation data increasing the likelihood of another cut. This is in stark contrast to market sentiment earlier this year, when it was widely believed that European central banks would make significant rate cuts before 2026. Similarly, the Swiss National Bank, which previously led with rate cuts and multiple reductions, has also paused, with rates now at zero. “Many of these countries have already made several rate cuts—the policy rate is no longer restrictive,” said Fidelity International fund manager Mike Riddell. “The most notable change in rates over the past month is that some central banks that previously led with rate cuts are now expected to hike, rather than continue cutting.”