Emerging markets will get an earlier start on easing cycles: S&P

Emerging markets will get an earlier start on easing cycles, said S&P global market intelligence in December.

The rating agency also added that easing cycles already underway in Chile, Brazil, Mexico and Peru are forecasted to continue in the period ahead, with rate cuts also forecasted in 2024.

"With confidence building that consumer price inflation rates will fall back to target, monetary policy pivots are predicted by mid-2024. Rate cuts will begin once concerns about underlying price pressures have abated. Quantitative Tightening (QT) by the world's major central banks will continue," said S&P.

Earlier this month, the US Federal Reserve also talked about inflation and gave forward guidance as far as the rate cuts are concerned.

In a highly anticipated move, the US central bank earlier this month opted to keep its key interest rate unchanged for the third time in a row, while signalling multiple rate cuts in 2024.

The Federal policymakers also signaled that they expect to make three quarter-point cuts to their benchmark interest rate in the upcoming year, fewer than five as expected by economists, and financial markets

The less rate cuts projected for the following year might not occur until the second half of 2024, indicating that officials think high borrowing rates will be required for most of next year to reduce both inflation and spending.

The central bank's Federal Open Market Committee (FOMC)'s policymakers have maintained their current target range of between 5.25 - 0 5.5 per cent for the federal reserve's funds rate.

On the inflation front, the Federal Reserve is focused on bringing down inflation through rise in interest rates, while making sure not to push the US economy into recession, as the US Fed Chair, Jerome Powell, warned that the country's economy could still make an unexpected return into recession, even after a resilient performance in  2023.

Whereas in India, RBI Governor Shaktikanta Das maintained a similar stance when stating that taming inflation is a top priority.

The country's retail inflation, measured by the consumer price index (CPI), rose to 5.55 per cent in November from 4.87 per cent in October this year, as per the latest data from the Ministry Of Statistics and Programme.