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Trump has repeatedly expressed his displeasure with the ECB cutting rates 8 times since the end of the central bank’s hiking cycle one year ago; he certainly won’t be happy that three other European central banks joined the easing fray overnight as the global economy once again careens toward the abyss.
In the span of less than 24 hours, three rate cuts by three central banks in Europe underscored the dramatic global shift toward policy easing as monetary officials seek to manage “the fallout from Trump’s unpredictable trade policies” as Bloomberg puts it, but really that’s just a diversion for the real cause: global economic slowdown now that the last traces of stimulus from the post-covid monetary and fiscal bonanza fade away.
Central bankers in Switzerland and Sweden had suggested as recently as March that they were likely done easing, but the Swiss National Bank instead trimmed borrowing costs by 25 basis points on Thursday – and becoming the first major bank to cut rates back to zero (and in some cases, negative) – following a similar move by Sweden’s Riksbank a day earlier.
And an easing pivot by Norway, also on Thursday, was altogether more dramatic, with another quarter-point cut that none of the economists surveyed by Bloomberg predicted.