Central banks step back as markets search for direction

Record-plc

December marked a turning point for major central banks, with policy decisions that signalled a shift away from the emergency footing of recent years.

In the US, the Federal Reserve cut rates by 25 basis points in its final meeting of the year, but this was no re-entry into an easing cycle. With its 2026 outlook showing just one more cut planned, the Fed appeared to be drawing a line under the policy support phase. Incoming data made that caution look reasonable. Inflation and jobs figures were weaker than expected, but noise from earlier data delays left the underlying trend unclear.

The Bank of England also lowered its policy rate by 25 basis points, but the decision was narrow and far from a strong signal. Inflation has eased and employment data suggests some cooling, yet the Bank remains wary of declaring victory. Markets took the move in stride, and sterling remained firm.

In the eurozone, the European Central Bank left rates unchanged but surprised with stronger forecasts. Growth and inflation expectations for the coming years were revised higher, mostly due to persistent price pressures in services. The ECB offered no new guidance, and the euro gained modest ground, helped by a relatively constructive outlook compared with the US and UK.

Japan stood apart by raising rates, the first step of normalisation in a long period of extreme policy accommodation. The decision reflected concerns over the yen and domestic fiscal stability, but markets were unconvinced. The yen weakened further in December, with investors sceptical that the Bank of Japan can move much further without political pushback or economic fallout.

Record plc (LON:REC) develops bespoke, high-quality, sophisticated solutions for institutional investors, a unique offering stemming from Record’s knowledge and expertise gained from its core currency hedging markets.

Share on:
Find more news, interviews, share price & company profile here for:

Latest Company News

Record plc AUM rises 6% to $122.0bn in first quarter

Record Plc has reported a 6% increase in assets under management to $122.0 billion for the quarter ended 30 June 2026.

US policy shifts increase currency market sensitivity

June’s currency markets were driven by a stronger dollar, less predictable US monetary policy and lower energy pressure after the reopening of the Strait of Hormuz.

Record targets growing demand for currency risk management

Record sees global fragmentation and rising currency volatility increasing demand for active hedging and diversified foreign exchange strategies.

Record strengthens Swiss real estate platform with Admicasa deal

Record’s 50% stake in Admicasa gives it a regulated Swiss real estate platform and expands its private markets business.

Dollar strength returns as policy and geopolitics drive FX markets

Currency markets in May were driven by dollar strength, geopolitical risk, energy disruption and shifting central bank expectations.

Record shortlisted for FX Solution of the Year

Record has been shortlisted for FX Solution of the Year at the Alternative Credit Awards Europe 2026.

Search