Filtered by Topic: Monetary Policy Use setting Monetary Policy
Softer inflation gives CBRT some breathing space The softer-than-expected Turkish inflation figure for March, of 38.1% y/y, suggests that the sell-off in the lira last month hasn’t exerted significant upwards pressure on consumer prices (yet). And as …
3rd April 2025
NBP remains on hold, although case for rate cuts starting to build The National Bank of Poland (NBP) left is policy rate on hold again today, at 5.75%, and while our forecast is for policy settings to remain unchanged throughout 2025, the risks of an …
2nd April 2025
Central Europe recovering, Russia faltering The rise in the manufacturing PMIs in Central Europe in March adds to evidence that the region is recovering from its recent soft patch. In contrast, the drop in Russia’s PMI suggests the economy may be starting …
1st April 2025
RBA’s easing cycle will be shallow While the RBA is becoming increasingly confident that inflation will sustainably return to target, we still expect its easing cycle to be shallow. The Bank’s decision to leave the cash rate unchanged at 4.10% was …
Door is open for another 50bp cut in May The statement accompanying the Mexican central bank’s (Banxico’s) decision to lower its policy rate by another 50bp cut, to 9.00%, today suggests that growth concerns are rapidly overtaking inflation concerns. …
27th March 2025
Inflation rises again, more rate cuts on the cards The further rise in Brazil’s headline inflation rate to 5.3% y/y in the first half of March means that, with Copom shrugging off the weakness of the latest activity data and inflation likely to rise …
Norges Bank to cut very cautiously, if at all This morning’s decision by Norges Bank not to follow through with the rate cut that it signalled in January was no surprise. The Bank also revised its interest rate projection up. We forecast two interest rate …
Easing cycle paused, and space for additional rate cuts narrows The Czech National Bank (CNB) left its policy rate on hold today, at 3.75%, and we think that the scope for further interest rate cuts this year has become more limited. We had previously …
26th March 2025
MNB on hold, high inflation to tie new governors hands The Hungarian central bank (MNB) left its base rate unchanged today, at 6.50%, and we think its easing cycle will remain on pause throughout 2025 as inflation remains stuck above target. Analysts have …
25th March 2025
The further easing of core services inflation in Mexico in the first half of March combined with recent weak activity data paves the way for Banxico to deliver another 50bp cut at its meeting on Thursday. The headline rate was unchanged from the first …
24th March 2025
Weak data to bolster calls for monetary easing The weaker-than-expected February retail sales data out of Poland suggests that the economy may have slowed a bit more sharply than we had been anticipating this quarter. While this won’t prompt the central …
CBR sounds slightly less hawkish at it leaves rates on hold The decision by the Central Bank of Russia (CBR) to leave its policy rate on hold at 21.00% today was accompanied by somewhat less hawkish communications. While we doubt the CBR will cut interest …
21st March 2025
Turkey’s central bank responds with a rate hike The decision by Turkey’s central bank (CBRT) to hike its overnight lending rate from 44% to 46% today suggests that policymakers have been spooked by the market volatility yesterday and are keen to reassure …
20th March 2025
For an updated and more detailed version of this analysis, click here . Committee less committed to collection of rate cuts The Bank of England was always going to continue its cut-hold-cut-hold pattern by leaving interest rates at 4.50% today but, in the …
Riksbank's next move likely to be a hike The Riksbank left both its policy rate and interest rate forecasts unchanged at today’s meeting, suggesting that monetary policy will be on hold for the foreseeable future. However, we think the Bank is likely to …
On hold throughout 2025 Taiwan’s central bank (CBC) left its main policy rate on hold today (at 2.0%), and is likely to leave rates unchanged throughout 2025. The decision to keep rates on hold came as no surprise and was correctly predicted by all 33 …
Today’s cut the last of the cycle for SNB We think today’s SNB rate cut, taking the policy rate from 0.5% to 0.25%, will be the last in this cycle. While inflation was very low in February, at just 0.3%, and may fall further in the coming months, …
This page has been updated with additional analysis since first publication. Labour market cooling rather collapsing With the labour market cooling rather than collapsing and wage growth stuck in the 5.5-6.0% range, we doubt the Bank of England will cut …
New Zealand economy escapes recession As expected, the New Zealand economy came out of recession at the end of last year. As the impact of recent monetary loosening filters through, we expect the recovery to continue apace in the coming quarters. The 0.7% …
19th March 2025
Copom shrugs off growth concerns and flags another hike The Brazilian central bank made clear in the statement accompanying today’s 100bp interest rate hike (to 14.25%) that it’s far more concerned about high inflation than weakness in the economy. We now …
Fed continues to expect two rate cuts this year, while slowing QT to a crawl Although the FOMC stuck to its median projection for two interest rate cuts this year, some officials now share our view that further loosening is unlikely and we continue to …
The sharp drop in the Turkish lira on the news that the main opposition leader, Ekrem İmamoğlu, has been arrested will complicate the central bank’s task of bringing inflation down and raises big questions about the government’s ability to sustain …
Soft inflation keeps rate cut in play The weaker-than-expected South African inflation figure for February, of 3.2% y/y, keeps the door open for the Reserve Bank to lower the repo rate by 25bp (to 7.25%) at its meeting tomorrow. The outturn was unchanged …
Rates on hold, but further easing likely later in the year Bank Indonesia today left its main policy rate unchanged (at 5.75%) but hinted that further easing was likely later in the year. We are maintaining our view that the central bank will cut rates …
Bank of Japan will lift rates to 1.5% by 2027 The BoJ’s decision to leave policy settings unchanged today was widely anticipated but we still think that the Bank’s tightening cycle has much further to run. After having lifted its policy rate to 0.5% in …
Growth in Chile’s economy slowed to 0.4% q/q in Q4, but more timely monthly activity data suggest that the economy headed into 2025 with more momentum. This, combined with above-target inflation, means that the central bank is likely to stand pat at its …
18th March 2025
NBP on hold, talk of rate cuts in H2 may be premature The decision by the National Bank of Poland (NBP) to leave its policy rate on hold today, at 5.75%, was widely anticipated, but we think that interest rates will stay higher than most others expect …
12th March 2025
Bank cuts again but warns that it must protect against tariff-induced inflation Although the Bank of Canada cut interest rates by 25bp again today, it also warned that “monetary policy cannot offset the impacts of a trade war” and that it must guard …
Inflation jump keeps door open for more rate hikes The sharp rise in Brazilian inflation to 5.1% y/y in February is likely to be followed by further increases in the coming months. Our base case is that next week’s Copom meeting will see the final (100bp) …
Inflation plunges, opening the door for first rate cut Egypt’s headline inflation rate slowed sharply from 24.0% y/y in January to a near three-year low of 12.8% y/y in February, which should pave the way for the Central Bank of Egypt (CBE) to start its …
10th March 2025
Another 50bp cut on the cards The rise in Mexico’s headline inflation rate, to 3.8% y/y in February was entirely driven by non-core inflation and therefore won’t be a major concern for the central bank. Indeed, we think that the weakness in the economy …
7th March 2025
Period of unanimous support for rate cuts is over The ECB’s decision to cut its deposit rate from 2.75% to 2.50% today came alongside new language which shows that policymakers are becoming less certain about the future path of interest rates. Looser …
6th March 2025
CBRT cuts again, easing cycle has further to run The communications accompanying the decision by the Turkish central bank (CBRT) to cut its policy rate by 250bp again today, to 42.50%, suggest that policymakers were reassured by the fall in inflation in …
Rates on hold (again), no change likely this year Bank Negara Malaysia (BNM) today left its main policy rate unchanged at 3.0%, and once again made clear that it was in no rush to adjust its monetary policy settings anytime soon. The decision comes as no …
Little prospect of a reflationary rebound Chinese policymakers have stuck with an ambitious target for real GDP growth but have become more cautious on the outlook for nominal growth and inflation. And while they did deliver some increase in fiscal …
5th March 2025
RBA will only deliver shallow easing cycle The minutes of the RBA’s February meeting are consistent with our view that the Bank will continue to ease policy but won’t cut interest rates very far. It came as no surprise that the Board debated the decision …
4th March 2025
250bp rate cut this week on the cards The weaker-than-expected Turkish inflation figure for February, of 2.3% m/m, will provide some reassurance that the spike in January was a one-off. And it keeps the door open for the central bank to lower the one-week …
3rd March 2025
Softer price pressures pave the way for further rate cuts The smaller-than-expected increase in South Africa’s headline inflation rate, to 3.2% y/y, supports our view that the Reserve Bank can press ahead with its easing cycle over the coming months. The …
26th February 2025
BoT to cut rates further over the coming year Thailand’s central bank (BoT) today cut interest rates by a further 25bps (to 2.00%), and we think more easing is likely before the end of the year. Today’s decision was predicted by just 10 out of the 26 …
This page has been updated with additional analysis since first publication. With price pressures remaining subdued, RBA can ease a bit further The relatively soft CPI print for January should ease some of the RBA’s concerns about the stickiness of …
MNB on hold ... and probably for some time The Hungarian central bank (MNB) left its base rate on hold again today, at 6.50%, and we think that its easing cycle will remain on pause throughout 2025. That’s a more hawkish view than the latest consensus …
25th February 2025
Inflation jumps, Copom to deliver more tightening The jump in Brazil’s headline inflation rate to 5.0% y/y in the first half of February means Copom will almost certainly press ahead with another 100bp hike in the Selic rate to, 14.25%, at its March …
Further interest rate cuts coming The Bank of Korea cut interest rates today by 25bps (to 2.75%) – the third cut in the past four meetings. The move was predicted by 35 out of 36 analysts polled by Reuters, including ourselves. The central bank will …
BoI leaves rates on hold, but getting closer to easing The communications accompanying the decision by the Bank of Israel (BoI) to leave its policy rate on hold again today, at 4.50%, were slightly less hawkish than at the previous meeting, and support …
24th February 2025
Odds shifting in favour of another 50bp cut The fall in core inflation in Mexico in the first half of February combined with weak economic activity, means that Banxico is likely to press ahead with another 50bp cut at its meeting next month. The outturn …
Polish economy starts 2025 on the front foot The stronger-than-expected activity data out of Poland for January suggest the economy has carried over some of the positive momentum from the end of last year. Alongside the recent strength of inflation, this …
CBE stands pat, but easing around the corner The Central Bank of Egypt (CBE) left its overnight deposit rate unchanged at 27.25% today but, with inflation set to slow sharply over the next couple of months, we think policymakers will start the monetary …
20th February 2025
Rates on hold, CBN to turn to easing soon The Central Bank of Nigeria confirmed today that its tightening cycle was at an end by leaving the policy rate at 27.50% today, and we think its attention will quickly turn to rate cuts, probably beginning in May …
Fed in no hurry to resume cutting rates The minutes of the Fed’s late-January policy meeting underline that, having cut rates by a cumulative 100bp, officials are in no hurry to resume loosening monetary policy, even though most still thought the current …
19th February 2025
Rates on hold, but further easing likely later in the year Bank Indonesia today left its main policy rate unchanged (at 5.75%) but hinted that further easing was likely later in the year. We are maintaining our view the central bank will cut rates …
