# Major central banks renew rate hike push in May Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-06-01 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Major central banks push for more rate hikes in May Meta Description: Discover how major central banks are pushing for rate hikes in May, despite growth concerns and sticky inflation data. Find out more here. URL: https://financedigest.com/major-central-banks-renew-rate-hike-push-in-mayhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-06-01t070237z1lynxmpej50171rtroptp4europe-deutsche-bank-1736813945724-compressed.jpg) # Major central banks renew rate hike push in May By Karin Strohecker and Vincent Flasseur LONDON (Reuters) – The pace of interest rate hikes across major central banks showed little sign of slowing in May but the scale of the tightening tapered off, with growth woes and “sticky” inflation data prompting policymakers to tread more cautiously. All six of the central banks overseeing one of the 10 most heavily traded currencies and that met in May hiked rates. Central banks in Australia, New Zealand and Norway [joined the European](https://www.financedigest.com/uber-executive-says-european-taxis-joining-platform.html "Uber executive says European taxis joining platform") Central Bank, the Bank of England and the Federal Reserve in lifting benchmark rates last month by 25 basis points each, for a cumulative 150 bps. That compares with two hikes across five meetings at G10 [central banks](https://www.financedigest.com/central-bank-of-armenia-choses-intellects-quantum-central-banking-platform-for-its-digital-transformation.html "Central Bank of Armenia choses Intellect’s Quantum Central Banking Platform for its Digital transformation") in April. At the height of the tightening cycle in September last year, eight [central banks hiked rates](https://www.financedigest.com/a-tale-of-two-central-banks-what-the-latest-interest-rate-decisions-mean-for-investors.html "A tale of two central banks – what the latest interest rate decisions mean for investors") by a cumulative 550 bps. Inflation has proven sticky, even as growth weakens,” said Jean Boivin, [head of the BlackRock Investment](https://www.financedigest.com/unicredit-corporate-investment-banking-appoints-eriksatvars-as-head-of-structured-trade-export-finance.html "UniCredit Corporate & Investment Banking appoints EriksAtvars as Head of Structured Trade & Export Finance") Institute in a note to clients on Tuesday. [“Markets are reassessing policy](https://www.financedigest.com/sompo-international-deploys-guidewire-system-for-london-market-policy-management.html "Sompo International Deploys Guidewire System For London Market Policy Management") rate expectations as sticky inflation makes clear central banks won’t cut them this year – or will keep hiking. Year-to-date, G10 central [banks have delivered](https://www.financedigest.com/true-contextual-banking-experience-delivered.html "True Contextual Banking Experience Delivered") 21 rate hikes and tightened by a total of 725 bps. That compares with 54 [rate](https://www.financedigest.com/global-shares-rise-dollar-rebounds-as-fed-seen-on-target-for-rate-hike.html "Global shares rise, dollar rebounds as Fed seen on target for rate hike") hikes in the whole of 2022 and 2,700 bps of rate hikes. Meanwhile, [emerging markets](https://www.financedigest.com/the-benefits-of-investing-in-emerging-market-stocks-for-long-term-growth.html "The Benefits of Investing in Emerging Market Stocks for Long-Term Growth") were slightly further advance in the cycle with some central banks changing tack to easing mode. Fifteen out of 18 [central banks in the Reuters sample of developing economies](https://www.financedigest.com/two-speed-economy-in-sweden-central-bank-business-survey-shows.html "Two-speed economy in Sweden, central bank business survey shows") met to decide on rate moves, but only policymakers in Israel, South Africa, Thailand and Malaysia hiked, and by a cumulative 125 bps. That compares with 11 meetings in April, where two central [banks delivered](https://www.financedigest.com/delivering-strong-customer-authentication-in-the-banking-sector.html "Delivering Strong Customer Authentication in the Banking Sector") a total of 50 bps. Hungary became the first European nation to loosen policy, cutting its emergency one-day deposit rate which it had launched in October to shore up its falling currency, by 100 basis points to 17% in May. The one-day deposit rate is not reflected in the Reuters sample. However, the trajectory ahead might not be a smooth one. March and April data confirm that emerging markets have broadly [passed their inflation](https://www.financedigest.com/dollar-rises-as-u-s-debt-bill-passes-house-euro-slides-ahead-of-inflation.html "Dollar rises as U.S. debt bill passes House, euro slides ahead of inflation") peaks, given decreasing energy prices and strong base effects,” said S&P Global Ratings in a recent report. But food inflation had remained stickier than expected, S&P added. Data published in May showed the UN [world food price](https://www.financedigest.com/world-food-prices-fall-to-two-year-low-in-may-un-food-agency.html "World food prices fall to two-year low in May – UN food agency") index had risen in April for the first time in a year. We currently expect EMs to reach their respective [central bank](https://www.financedigest.com/limited-support-for-central-bank-digital-currencies-in-global-investment-industry-survey.html "Limited support for central bank digital currencies in global investment industry survey") targets (for inflation) by the end of 2024,” S&P added. (Reporting by Karin Strohecker and Vincent Flasseur; Editing by Hugh Lawson) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---