The coming week poses to be volatile for the world’s financial market as the major central banks plan to conduct policy meetings that are expected to outline the course of the interest rates. Investors are paying attention to these decisions as a signal to more rate cuts across the globe may be under way.

The star event, of course, is the Federal Reserve two-day meeting that commenced today Tuesday. The U.S. central bank’s move is primarily seen to reduce interest rates and 25 basis points based on what market traders are betting on but there are odds that a half-point cut is possible. Its decision will indeed determine the trend of the global market since other central banks are also expected to come up with similar measures later in the week.

Federal Reserve Takes Center Stage
This week’s Federal Reserve decision forms part of a critical inflexion point in the U. S. monetary policy. Since the last year, the Federal Reserve has gradually increased the interest rates with the aim of controlling inflation and now it shows readiness to make further changes. The CME’s FedWatch Tool reveals that 41% of traders expect 50 bps cut while embedded sense makes it 25 bps.

John Bilton, from J. P. Morgan Asset Management, the global head of multi-asset strategy added that this now means that some markets are in a process of rate-cutting cycle. On CNBC’s “Squawk Box Europe,” he said with the Fed and the ECB, would likely move to a long-term trend in which they would cut rates which could extend to 2025. He also said that the phase is perfectly acceptable since there is no recession but it brings a lot of risks as investors adjust to the new structure of interest rates.

Focus on Other Global Central Banks
Of course, the main event will be the Federal Reserve’s, but other global central banks will deliver decisive policy decisions this week.

Central Bank of Brazil will convene their bi-weekly meeting on Tuesday and the meeting will end on Wednesday. Brazil have been reducing it since July 2023 for to boost growth but due to better than expected second quarter data it should increase the rates by 25 bps to 10=Selic. 75%. It is however still possible that further hikes may take place in the course of the next months subject to how the economy is likely to shape itself.

The BoE is not anticipated to shift its 5 % interest rate at its meeting Thursday, whilst the UK economy remained flat in two consecutive months. The Reuters poll of 65 economists showed that none of them expected the bank to lower the rate during the current week. However, the BoE most likely is to commence rate removal somewhere in the year possibly in November.

The South African Reserve Bank equally is need to convene Thursday and it is expected to deliver its first rate cut since the outbreak of the pandemic. While there’s a slight reduction to ease the pressure on overstretched of South Africa’s economy, which has tackled high inflation and slow growth for some time now.

Also on the same day, inspection and policy meeting will be held at Norges Bank, Norway. It is thought the bank will leave its benchmark interest rate at 4% next month. 5 percent-the highest in 16 years after two previous increase made against inflation. The central bank had already given a hint that it could agree to let the rates remain unaltered for a quite long time.

The Japanese Monetary Bank will close this week’s action by announcing its interest rate decision on Friday. There are no near-term expectations to change, although fifty one percent of economists surveyed by Reuters expect a rate hike by year-end. BoJ has been one of the few exceptions amongst the central banks that has kept its monetary policy extremely accommodative in the bid to spur its lackluster economy.

Why 2023 Is Becoming a Year of Monetary Policy End
There is hope that this week’s central bank meetings may signal the beginning of a new round of the global monetary policy. After uplifting the inflation capitalist cogs in the wheel of some parts of the world and after slowing down the economic growth in others, central banks are changing gears to fight new threats. With the Federal Reserve’s move, it opens the gates further to more rate cuts around the globe, although the higher level of uncertainty would mean that the markets are more likely to turn more volatile as participants attempt to come to terms with the developments.

Pundits are keen to know whether the globaleconomy can avoid a recession given the rate-cutting cycle. A week’s judgment will provide essential prognosis not only of the economic performance through the rest of the year 2024 but also of the investors’ approach and demeanour through a lot of 2025. This is truly a very crucial week already, and let’s now see how the central banks are going to address the issue of growth and inflation at the same time.