Hawkish Shift at Major Central Banks Despite Stagnant Interest Rates

Twelve of the world's major central banks have shifted their policy sentiment to a more hawkish direction over the past year, according to data from Permutable. The change in sentiment is significant, as it indicates that these central banks are leaning towards raising interest rates or tightening monetary policies.

The Fed and Bank of England, which have both been on hold since December, saw their policy-outlook sentiment move 81.2 points and 36.0 points respectively towards a more hawkish position. Despite this shift, neither bank has raised interest rates in the past year.

Permutable's Major Central Bank Sentiment Index measures directional policy-outlook sentiment for 14 major central banks. The index scores range from -100 to +100, with positive readings corresponding to a more hawkish outlook and negative readings to a more dovish one. Japan and Brazil sit at opposite ends of the current ranking, at +99.4 and -96.0 respectively.

The Reserve Bank of New Zealand records the largest twelve-month move at +139.9, taking its current reading to +87.1 after raising the official cash rate to 2.50% on 8 July.