The thing to note about the picture here is that it doesn’t tell you the whole story. But what is evident at least is that price pressures have definitely eased as compared to what we saw last year. That at least provides some hope that inflation is on the right trajectory in moving back towards the 2% mark that central banks are craving for.
However, what is also important to remember is the level of core inflation and that particular measure is still sitting relatively high for a lot of the economies highlighted above.
Until we see that show further signs of easing and also moving back towards the 2% mark, only will policymakers feel confident enough to start pulling back on the language on tightening monetary policy further.
That said, it doesn’t mean that we won’t see a “pause” of sorts. The current narrative is that they will still want to keep rates higher for longer. But the definition for that – in particular the notion of ‘longer’ – very much depends on how the economy holds up and how quickly inflation may fall in the year(s) ahead.