The combination of easing supply chains, lower
commodity prices together with powerful base effects
saw inflation continue to soften over the last 3 months,
down from the highs in the middle of 2022.
The improved inflation outlook was enough for central

banks pause rate hikes this quarter, bringing a much-
welcomed breather from what has been one of the

sharpest hiking cycles in history.
Falling inflation has the effect of tightening real policy
rates without further changes to interest rates.