Global central banks ended April with measured policy moves as persistent inflation and escalating trade protectionism—led largely by the United States under President Donald Trump—heightened market uncertainty and cast doubt over global growth prospects. Policymakers increasingly flagged the growing risk of a “stagflation” scenario, where inflation remains high even as economies slow down. Central banks from Canada to South Korea opted to hold rates steady, citing tariff-related unpredictability, while others, including the European Central Bank and Türkiye, diverged in opposite directions.
The Bank of Canada and the Bank of Korea both kept their policy rates unchanged at 2.75%, emphasizing the impact of U.S. trade policies on market stability and global supply chains. Russia’s Central Bank also maintained its ultra-tight rate of 21%, aiming to suppress inflation despite strong domestic demand. Meanwhile, central banks in Poland and Hungary stayed put as well, awaiting clearer signals in a volatile international environment.
However, select easing came from the European Central Bank, which cut its rates by 25 basis points, with President Christine Lagarde citing weakening eurozone exports and increasing global instability. New Zealand and India followed with rate reductions, aiming to support growth amid softening inflation. In stark contrast, Türkiye delivered a dramatic 350 basis point rate hike to 46%, driven by persistent inflationary pressures and the threat of extended trade disruptions, signaling continued divergence in global monetary strategies.
