The peak interest rate era is over. Here's what investors are watching

Central banks around the world are set to kick off or continue interest rate cuts this fall, bringing an end to an era of historically high borrowing costs.

In September, the U.S. Federal Reserve is all but guaranteed to join the European Central Bank, the Bank of England, the People's Bank of China, the Swiss National Bank, Sweden's Riksbank, the Bank of Canada, the Bank of Mexico and others in cutting key rates, which have been held at levels not seen since before the Financial Crisis of 2007-2008.

Money markets had already fully priced in a rate cut from the Fed, but last week investors gained even more confidence in the path of easing ahead.

At the annual Jackson Hole symposium, Fed Chair Jerome Powell not only said the "time has come for policy to adjust," but that the central bank could now equally focus on doing "everything" it can to keep the labor market strong and continue progress on inflation.

Current pricing suggests high expectations for three 25 basis point cuts by the Fed before the end of the year, according to CME's FedWatch tool. That will keep the Fed roughly in-line with its peers, despite it moving later.

The European Central Bank is seen cutting rates by 25 basis points at least three times in total this year; and the Bank of England by the same increment a total of three times, according to LSEG data. All three central banks are seen further continuing monetary easing at least in early 2025, even as stickiness in services inflation continues to trouble policymakers.

For the global economy, that means a broadly lower-rate environment next year, along with significantly reduced pressures from inflation. In the U.S., a recent spike in recession fear has largely abated, and despite where there is weakness