At least 14 central banks set to meet in May: Will doves flutter or hawks take over

XX (add number here) central banks set to meet in May, will doves flutter or hawks take over

Several central banks are expected to adjust their monetary policies in May. The markets are leaning toward a cautious yet growing consensus: the global monetary cycle is entering a softening phase.

With inflation appearing to moderate and growth risks intensifying in key regions, investor expectations are increasingly skewed toward rate cuts — or at the very least, a policy shift in tone.

“The global macro backdrop has firmly put rate cuts on the table,” said Niraj Karkera, Head of Fisdom. He added that a blend of softening inflation, demand-side weakness, and geopolitical risks is pushing major central banks toward liquidity-friendly postures.

Despite a disappointing GDP print and concerns that new U.S. tariffs could reignite inflation, analysts widely expect the Federal Reserve to hold rates steady at 4.25 to 4.5% in its May 6 meeting. The Fed appears to be buying time amid unresolved uncertainty around trade policy, inflation trajectories, and labor market resilience.

The Bank of England (BoE), in contrast, is widely expected to deliver a 25-basis-point rate cut at its May 8 meeting. Recent softening in inflation and signs of strain in the labor market (what some have dubbed a “tariff tantrum”) have raised the urgency for pre-emptive easing.

The Reserve Bank of Australia (RBA), which meets on May 19, is also widely expected to cut rates. “RBA is widely expected to cut,” said Chinchlakar, noting that while a 25 bps cut is the base case, downside risks to growth have intensified, warranting a more aggressive stance.

In Latin America, Mexico is largely expected to cut by 50 bps on May 15, as per consensus forecasts. Meanwhile, Brazil, having hiked rates earlier in March, is seen taking a more cautious approach. “They were expecting 50 bps more but the inflation has been coming down, slowly,” explained Bagga, suggesting that any additional tightening may now be marginal.

With Japan and Malaysia expected to hold rates steady, and countries like Turkey and Argentina constrained by domestic inflation challenges, the global monetary environment remains fragmented. But what ties them together is the looming shadow of U.S. recession risks and potential stagflation, which could make the current round of policy decisions particularly consequential.

Domestically, India appears well-positioned to extend its easing cycle. Although the Reserve Bank of India (RBI) will meet only in June, market participants are already pricing in the potential for further cuts, driven by cooling inflation, strong growth expectations, and healthy foreign inflows.

Market expert Ajay Bagga said that “we are in a good position to cut further rates,” citing supportive fiscal conditions, an appreciating rupee, and improved credit capacity.