Global Central Banks Diverge: Policy Outlook Through February 2026

<category>Macro</category> <title>Global Central Banks Diverge: Policy Outlook Through February 2026</title> <content> February 5, 2026 — Global central banks are splitting along policy lines, with key decisions across 10 developed markets: - United States: The Federal Reserve left rates unchanged and priced one more 25 bps cut by July; potential rate reductions are favored by outgoing Chair nominee Kevin Warsh. - United Kingdom: The Bank of England held rates after a narrow vote, signaling easing remains a live option; traders price nearly 50 bps of cuts by year-end. - Norway: Norges Bank maintains a likely but not immediate path to further easing despite December core inflation reaching 3.1% y/y. - Switzerland: The SNB keeps rates at 0% amid a weak Swiss franc and subdued inflation expectations. - Canada: The Bank of Canada held at 2.25% amid trade uncertainty and slower growth; further easing is still on the table. - Eurozone: The ECB kept rates at 2% as policy is likely unchanged this year, though geopolitical risks and currency volatility could shift that. - Sweden: The Riksbank signals rates will remain unchanged for some time as the economy is expected to pick up and inflation cool. - New Zealand: The Reserve Bank of New Zealand is pivoting hawkish; inflation hit 3.1% q-o-q, pricing two 25 bps hikes by year-end. - Australia: The Reserve Bank of Australia raised rates on February 2, its first hike in two years, amid strong consumer spending, high house prices, and ample credit. - Japan: The Bank of Japan lifted rates in December and held in January, diverging from peers as it seeks to curb a weak yen-driven inflation outlook. Markets closely watch these divergences for implications on Treasuries, currencies, and commodities.