Central banks expected to pause rate hikes following SVB collapse

Decisions over next week

Central banks may be set to take a pause in their rate-hiking cycle following the collapse of Silicon Valley Bank and the wider stress throughout the financial sector.

The European Central Bank's rate-setting decision is due on 16 March, while the Federal Reserve and Bank of England come next week, on 22 and 23 March, respectively. Markets now predict a 32.8% chance of no hike from the Fed, with a 67.2% chance of a 25bps hike Before SVB's collapse last Friday (10 March). a hike was considered guaranteed, with markets split between chances of a 25bps hike (59.8%) and a 50bps hike (40.2%). Markets have been predicting a similar path for the Bank of England, with traders expecting an almost 100% chance of a 25bps rate hike last week, before dipping ...