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Steady rates and Implications
Key Takeaways
5 min read
  • Mature market central banks are entering the “boring” cyclical phase where rates are held steady. This until growth deteriorates enough to become a bigger worry than inflation.
  • There are early signs that US growth is slowing, but it is too soon to hope for interest rate cuts.
  • In this high-rate environment, investors are chasing lower valuations across assets. Our risk management signals for crypto remain cautious overall. Our momentum model highlights Maker and Chainlink, and the strong improvement for Aave.

Central Banks enter a “pause” period

Over 10 central banks held a monetary policy meeting last week. The big picture is that Emerging Market (EM) central banks ex-Turkey are entering the rate cutting cycle, led by Brazil and Latin American central banks. Mature Market (MM) central banks are oscillating between “skip” or “pause” strategies, and communicating that they are close to peak rates for the cycle. The two surprises of last week were delivered by the Bank of England (BoE) and Swiss National Bank (SNB) which held rate steady, despite expectations for respective hikes. Both the BoE and SNB are paying more attention to lagged effects of monetary tightening on unemployment, economic activity and the housing market, which are showing...