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financial news agency, october 3 (editor xiaoxiang)the latest industry statistics show that, led by the federal reserve, the central banks of developed economies implemented the largest interest rate cuts since the beginning of the covid-19 epidemic in september.

among the g10 central banks that held interest rate meetings in september, five lowered their benchmark interest rates that month - among them, the federal reserve started its current easing cycle with a radical 50 basis point interest rate cut, while the riksbank, swiss national bank, and bank of canada the european central bank and the european central bank cut interest rates by 25 basis points that month.

this is since the central banks of advanced economies cut interest rates by a cumulative 615 basis points in march 2020 to support economies in widespread turmoil.the largest easing action taken by g10 central banks in a single month.as central banks in many developed economies have successively entered an interest rate cut cycle, people are now paying more and more attention to the depth and length of the original interest rate cut cycle.

"after the fed cut interest rates by 50 basis points, their message is very important - it shows that they are being vigilant, they know what's going on, they see job growth slowing, they are not asleep," muzinich & co. public said tatjana greil castro, global co-head of markets.

however, castro believes that unless there is an external shock, this may be a shallow easing cycle, which means that u.s. interest rates will eventually stay around 3-3.5%, and european central bank interest rates will be around 2-2.25%.

in fact, the fed's september dot plot also shows that the median forecast among fed officials is that long-term interest rates will be at 2.9%, which may mean that the era of ultra-low interest rates is gone forever.

federal reserve chairman powell said after the september interest rate meeting that the era of cheap money will not return. "intuitively, most people would say we're probably not going to go back to that (ultra-low interest rate) era where trillions of dollars of sovereign and long-term bonds were trading at negative rates. my personal feeling is that we there’s no going back to that,” powell said at the time.

as for emerging market central banks, the current situation is quite interesting.

among the 18 relatively major central banks of developing economies counted by the media, 13 held interest rate meetings in september, of which seven cut interest rates, four stayed on hold, and two raised interest rates.

seven emerging central banks including indonesia, mexico, south africa, the czech republic, hungary, chile and colombia cut interest rates that month, with the total rate of reduction reaching 200 basis points.

but there are also two companies that have raised interest rates. in addition to russia's central bank, which has been struggling to cope with pressure on the ruble exchange rate, raising interest rates by 100 basis points, brazil's central bank's move may be particularly eye-catching because it was one of the first central banks to initiate a rate cut cycle. but now its easing policy seems unsustainable. brazil's central bank raised its benchmark lending rate by 25 basis points last month, the first time it has raised interest rates in two years.

obviously, although most emerging economies are currently in an easing cycle, the fed's sharp interest rate cuts will not give every economy the same room for maneuver.

alexis taffin de tilques, head of debt capital markets for central europe, the middle east and africa at bnp paribas, said, "central banks in emerging markets have to protect their currencies and capital flows. the last thing they want to do is outflows and put their currencies under pressure."

however, overall, the pace of interest rate cuts in emerging economies during the year is undoubtedly accelerating. since the beginning of this year, the above-mentioned 18 emerging economies have cut interest rates a total of 36 times, with the total easing range reaching 1,525 basis points, which has exceeded the 945 basis points last year. so far in 2024, their combined interest rate hikes have been 1,100 basis points.