The Swiss National Bank (SNB) became the first major central bank to reduce interest rates this cycle. The SNB reduced rates by 25 basis points (bps) to 1.5%, its first cut in nine years, after Swiss inflation fell to 1.2% in February, marking the ninth consecutive month that prices have been within the 0-2% target range.

Hopes faded for interest rate cuts in March. While the US Federal Reserve and European Central Bank indicated that later rate reductions were possible, they stressed it was too early to consider such a move.

Central banks warned that financial markets might have become overly optimistic about the probability of rate cuts in the first quarter of this year, after headline inflation rates accelerated modestly in December followed by early indicators of economic activity strengthening in January.