A moderating economy in tandem with tighter financial conditions should lay to rest any prospect of a December hike. Nonetheless, Wednesday’s decision was unlikely to see policymakers signal a more dovish stance just yet, say experts.

The Federal Open Market Committee (FOMC) is widely expected to keep the benchmark interest rate within its range of 5.25% -5.50%. With attention focused on the ensuing press conference, several analysts put the likelihood of any material change in the opening statement and language at a minimum.

Bank desks pointed out that the December event comes against a different backdrop from the last two meetings. “The September meeting was during a period of very strong economic data, while the November meeting came amid a mixed slate of data,” Morgan Stanley’s Ellen Zentner noted. “The December meeting, however, comes amid a clearer deterioration in economic data.” 

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FRANKFURT – The European Central Bank is widely expected to hold rates at current levels Thursday for its last decision of 2023, and analyst are leaning in to see if policymakers are ready to hint at a more dovish stance.

The bank’s announcement is to come at the end of a central banking extravaganza set to start Wednesday with the Fed decision, which is to be followed by rate pronouncements from the Swiss National Bank, Norway’s central bank, and the Bank of England.

An economists’ poll said ECB officials will vote to leave the overnight deposit rate at 4.0% and the main refinancing rate at 4.5%.

A hold on Thursday would be the second straight after October’s, which followed 10 consecutive rate increases.

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Switzerland’s central bank is widely expected to leave its benchmark interest rates unchanged Thursday amid the slowing pace of consumer price growth in the Alpine nation.

An economists’ poll predicted the bank will hold its key policy rate at 1.75%.

Flagging consumer price growth in Switzerland sparked an unexpected rate hold in September and has likely ended the tightening cycle at the Swiss National Bank. “The lower-than-expected Swiss inflation in November both shut the door on the idea of further rate hikes and opened the door to rate cuts,” wrote analyst Adrian Prettejohn, at Capital Economics.

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The UK economy shrank more than expected in October as elevated borrowing costs took their toll, setting the stage for another quarter of stagnation that is widely forecast to persist through 2024.

Gross domestic product fell 0.3%, the first drop since July and following a gain of 0.2% in September, the Office for National Statistics said Wednesday. Economists had forecast a fall of 0.1%.

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