In 2022, the U.S. Federal Reserve (FED) began a period of tightening monetary policy. In March 2022, the FED raised interest rates for the first time in the year, marking its first rate hike since 2018. For the remainder of 2022, further rate increases are expected as the FED aims to combat inflation, which has surged to its highest level in 40 years. In May 2022, the FED is set to discuss a potential 50 basis point rate hike. According to CME Fed Watch’s forecast tool, there is a 98% probability that the FED will raise rates by 50 basis points in its next meeting.

The European Central Bank (ECB), alongside the FED, is among the major global central banks that are finally implementing monetary tightening policies. The ECB is leaning towards tightening monetary policy to address skyrocketing inflation in the EU, driven by rising energy and food prices. The geopolitical crisis between Russia and Ukraine has exacerbated the situation.

Currently, the ECB has not yet raised interest rates due to persistently weak domestic growth and inflation levels beyond the reach of monetary policy. However, an increase in rates is anticipated after the conclusion of its bond-buying program. The Pandemic Emergency Purchase Programme (PEPP) officially ended at the end of March 2022. The Asset Purchase Programme (APP) is also expected to gradually taper off and conclude in Q3 2022.

China continues to maintain its Zero-Covid policy. The country remains steadfast in its Zero-Covid-19 strategy, with widespread lockdown measures to be enforced. The situation at border crossings and ports is likely to remain challenging and unavoidable.