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Capital Economics says central banks likely to raise rates less than markets expect
Capital Economics says central banks are unlikely to raise rates as much as investors are currently anticipating over the next year. While elevated bond yields have tightened financial conditions, much of that tightening reflects expectations of higher policy rates and could reverse if central banks fail to deliver. The firm expects energy prices to fall next year, which would limit second‑round inflationary effects and reduce the need for further tightening.