Strong Labor Data Pushes Global Rate-Cut Expectations Further Out

State Street Investment Management’s latest Weekly Economic Perspectives note assesses how resilient labor markets, uneven growth, and persistent inflation pressures are reshaping expectations for central bank policy across major economies.

• State Street now expects the Federal Reserve to delay rate cuts until 2027 after US payroll growth surprised to the upside, reinforcing a prolonged “higher-for-longer” stance.
• Despite a 0.2% contraction in eurozone GDP, the report expects the ECB to continue tightening as inflation concerns outweigh weak growth dynamics.
• Australia’s softer GDP print masked strong domestic demand and a surge in investment linked to data-centre spending, keeping the possibility of further RBA hikes alive.

Read the full report for a detailed cross-market assessment of labor trends, inflation pressures, and diverging global monetary policy paths.