OCBC Group Research

OCBC Group Research maintains a cautious yet divergent outlook for global monetary policy as central banks navigate persistent inflation and labor market dynamics heading into June 2026. The institution projects the Federal Reserve will hold rates steady at 3.50-3.75% while potentially abandoning its easing bias, signaling a shift in policy tone. Conversely, the ECB and BoJ are expected to implement 25bps hikes, with the latter’s move representing a significant step toward policy normalization. While the BoE and RBA are anticipated to remain on hold to assess cooling labor markets, the RBNZ stands out with a notably hawkish pivot. The research underscores an emerging trend of localized monetary tightening, specifically highlighting the RBNZ’s intention to initiate a series of hikes starting in 3Q2026 to address stubborn inflationary pressures.