Major Central Banks Diverge on Rate Paths in June 2024

In mid‑June, several leading central banks announced differing monetary‑policy moves. The European Central Bank raised its key rate by 25 basis points – the first hike since September 2023 and the first tightening response to the energy‑price shock. The Bank of Japan also increased its short‑term policy rate by 25 basis points to 1.00%, the highest level since September 1995. By contrast, the U.S. Federal Reserve kept its policy rate unchanged for a fourth consecutive meeting, delivering a hawkish tone that exceeded market expectations. The Bank of England left its benchmark at 3.75%, and Brazil’s central bank cut its policy rate to 14.25% after a series of earlier reductions. The divergence reflects varied inflation pressures and uneven economic recoveries across regions, signalling that a single, globally synchronized policy cycle is ending.