BlockBeats News, November 25th, the market expects that next year the Fed's monetary policy will be significantly different from the European Central Bank's, as higher economic growth and inflation expectations in the United States will widen the gap between the two major economies.
Market pricing shows that by the end of next year, the Fed's rate cut magnitude will be only half of the European Central Bank's, which is facing sluggish economic growth and inflation below target.
Jennifer McKeown, Chief Global Economist at Capital Economics, said, "We expect that due to the rising inflation risks, the Fed will take a rather cautious stance, while the European Central Bank will respond strongly to economic weakness, leading to a divergence in the easing cycles of the two."