Filtered by Topic: Monetary Policy Use setting Monetary Policy
Today’s decision to leave interest rates unchanged, and the tone of the press release, were as expected. In the forthcoming press conference, Christine Lagarde is likely to push back against expectations for policy rates to start falling in April. It came …
25th January 2024
Hiking cycle at an end, rates to stay high The 250bp interest rate hike from Turkey’s central bank (CBRT) today, to 45.00%, marks an end to its tightening cycle. Encouragingly, the communications were relatively hawkish and suggest that policymakers …
Norges Bank today reiterated that it will leave its policy rate at 4.5% “for some time”. But we think that inflation will fall rapidly this year, so when the Bank does start to cut rates, it will do so more quickly than its forecasts suggest. The decision …
Bank drops its hiking bias The Bank of Canada’s decision to drop its tightening bias today is the first step toward interest rate cuts. We continue to think that the Bank’s forecasts for the economy are too optimistic, and that inflation will slow faster …
24th January 2024
The central bank (BNM) left the overnight policy rate unchanged (at 3.0%) today and we think monetary policy is set for an extended pause as policymakers attempt to strike a balance between supporting the economy and combating inflation. The decision …
Policy normalisation is in sight Although the Bank of Japan stood pat at its meeting today, we’re sticking with our view that policymakers will soon call time on negative rates. The Bank’s decision to leave its policy rate unchanged at -0.1% was correctly …
23rd January 2024
This page has been updated with additional analysis since first publication Labour market will turn faster than the RBA anticipates With labour market data for December disappointing expectations, we’re more convinced than ever that the RBA will take its …
18th January 2024
Policy rate left unchanged, central bank hints at cuts later in the year Bank Indonesia left its policy rate on hold at 6.00% at its meeting today, but gave further hints that provided the rupiah continued to hold up well against the US dollar, there …
17th January 2024
This page has been updated with additional analysis since first publication. Downward trend stalls, but drop to below 2% still coming in April The unexpected rise in CPI inflation from 3.9% in November to 4.0% in December (consensus and CE forecast 3.8%) …
This page has been updated with additional analysis since first publication . The PBOC fails to deliver Despite a cut being widely expected, the MLF was again kept unchanged today – for a fifth straight month. The main factor holding the PBOC back was …
15th January 2024
NBR won’t cut rates as far as most expect in 2024 The National Bank of Romania (NBR) left its policy rate unchanged at 7.00% today and, although a monetary easing cycle seems to be drawing nearer, we think that interest rates are unlikely to be cut as far …
12th January 2024
This page has been updated with additional analysis since first publication . The renewed fall in Brazil’s headline inflation rate in December, to 4.6% y/y, paves the way for another 50bp cut to the Selic rate (to 11.25%) at the central bank’s next …
11th January 2024
On hold again, rate cuts in Q2 The Bank of Korea (BoK) left its main policy rate on hold today (at 3.5%), but with inflation cooling and growth set to struggle, we think the central bank will cut interest rates sooner than most expect. The decision was …
Inflation slowing, but will remain above target until mid-2025 Egypt’s headline inflation rate eased for a third consecutive from 34.6% y/y in November to 33.6% y/y in December. Comments last night suggest that an enhanced IMF deal is near, which is …
10th January 2024
This page has been updated with additional analysis since first publication. Disinflation will pave the way for policy loosening before long With price pressures cooling in earnest, we’re growing increasingly confident in our call that the RBA will start …
NBP has limited scope for rate cuts in 2024 The National Bank of Poland (NBP) left interest rates on hold again today, at 5.75%, and we continue to think that the scope for monetary loosening ahead is relatively limited. While the consensus view in recent …
9th January 2024
This page has been updated with additional analysis since first publication. Jump in headline inflation is just a blip December’s jump in headline inflation in the euro-zone was widely anticipated and entirely due to a base-effects driven increase in …
5th January 2024
Minutes more nuanced than expected, given post-FOMC hawkish chatter The minutes of the mid-December FOMC meeting were slightly more dovish that we were expecting – more in line with the message delivered by Fed Chair Jerome Powell in his press conference …
3rd January 2024
Leaving the door open for one more hike Turkey’s central bank (CBRT) delivered a 250bp interest rate hike, to 42.50%, at today’s meeting and didn’t close the door on the tightening cycle. We’ve now pencilled in one more 250bp hike at the next meeting in …
21st December 2023
Bank Indonesia left its policy rate unchanged at 6.0% today for a second consecutive meeting, but in its press conference hinted at the possibility of rate cuts in the second half of next year. However, with economic growth set to struggle and inflation …
This publication has been updated with additional analysis from the post-meeting press statement and press conference. 75bp cuts to continue for the time being The Hungarian central bank (MNB) cut its base rate by 75bp again today (to 10.75%), and we …
19th December 2023
The Bank of Japan left policy settings unchanged today as widely anticipated. And while Governor Ueda is sounding more confident that 2% inflation will be sustained, we now expect the Bank of Japan to end negative interest rates in March rather than in …
Bank of Japan will end negative rates next month The Bank of Japan left policy settings unchanged today as widely anticipated but we still expect policymakers to end negative rates in January and to phase out Yield Curve Control later in 2024. The Bank’s …
RBA will soon turn dovish The minutes of the RBA’s December meeting reinforce our view that the Bank will be shifting to rate cuts before long. As it has done at virtually every meeting this year, the Board discussed the option of a 25bp rate hike …
CBR slows down tightening, cycle not yet over Russia’s central bank (CBR) delivered a 100bp interest rate hike at today’s meeting, to 16.00%, and we still think that strong inflation pressures will force another rate hike in Q1. Today’s hike was in line …
15th December 2023
ECB holding the line for now The ECB’s decision to leave its deposit rate unchanged at 4.0% today and make only limited changes to the policy statement suggests that policymakers are pushing back against market expectations for rate cuts to begin in March …
14th December 2023
Few signs Bank of England is starting to contemplate rate cuts The Bank of England sprung no surprises, leaving interest rates at 5.25% for the third time in a row and pushing back against the prospect of near-term interest rate cuts. While the recent …
SNB leaves rates unchanged, but policy loosening is imminent The SNB kept rates on hold at 1.75% at today’s policy meeting, but the monetary policy statement was dovish as policymakers placed less emphasis on selling FX assets and reduced their inflation …
Taiwan’s central bank (CBC) left its policy rate unchanged again today, but with economic growth set to slow sharply and inflation on its way down, we expect the CBC to start cutting rates from June. The decision to leave the policy rate unchanged, at …
Rates on hold, cuts coming sooner than most expect The central bank in the Philippines (BSP) today left its main policy rate unchanged (at 6.50%), and hinted that it would be necessary to keep monetary conditions tight for the foreseeable future. …
Copom sticking to 50bp cuts The statement accompanying the Brazilian central bank’s decision to lower the Selic rate by 50bp, to 11.75%, was slightly more dovish than the last one from November. But not enough has changed to make policymakers consider …
13th December 2023
Stubborn Fed demonstrates the SEP’s shortcomings The Fed’s reluctance to acknowledge that it will need to begin cutting its policy rate soon – to prevent a run-up in real rates – was predictable enough based on its intransigence ahead of previous turning …
This page has been updated with additional analysis since first publication . Another 50bp rate cut on the cards tomorrow The small fall in Brazil’s headline inflation rate in November, to 4.7% y/y, makes another 50bp interest rate cut (to 11.75%) at …
12th December 2023
Sharp fall in inflation, but rates likely to be left on hold next week The fall in Czech inflation to 7.3% y/y in November means that the start of a monetary easing cycle at next week’s policy meeting is still very much a close call. But at this stage we …
11th December 2023
RBI in no rush to loosen policy The RBI kept the repo rate on hold at 6.50% today as expected and continued to strike a hawkish tone. Against a backdrop of robust economic growth and a renewed rise in food inflation, we doubt the central bank will loosen …
8th December 2023
Stubborn services inflation means Banxico to tread slowly with cuts Although Mexico’s headline inflation rate was weaker than expected last month (at 4.3% y/y), uncomfortably strong services inflation supports our view that Banxico’s easing cycle (likely …
7th December 2023
Bank maintains tightening bias, but next move likely to be a cut The policy statement from the Bank of Canada was a bit more hawkish than we expected, with the Bank reiterating that it is still concerned about the outlook for inflation and “remains …
6th December 2023
Easing cycle paused The National Bank of Poland (NBP) left interest rates on hold as expected today, and we think the easing cycle will remain on pause until the end of Q1. With the economy recovering and the disinflation process likely to stall over the …
RBA is done hiking rates Although the RBA won’t tighten policy any further, there is a good chance that the Bank will hold the cash rate at its current peak for longer than we anticipate. The RBA’s decision to leave rates unchanged at its meeting today …
5th December 2023
Disinflation process entering a slower phase The small fall in Polish inflation to 6.5% y/y in November is likely to mark the start of a slower phase for the disinflation process over the coming months. Against this backdrop, we think the central bank …
30th November 2023
On hold again, rate cuts in Q2 next year The Bank of Korea (BoK) today left interest rates unchanged (at 3.5%) for a seventh consecutive meeting. The decision came as no surprise and was correctly predicted by all 36 economists polled by Reuters, …
The Bank of Thailand (BoT) today left interest rates unchanged (at 2.50%) and hinted that rates are likely to be left on hold for the foreseeable future. With inflation below target and the recovery likely to disappoint, we expect interest rates to remain …
29th November 2023
This page has been updated with additional analysis since first publication. RBNZ will cut rates in the second half of next year While the RBNZ signaled that it could hike rates further, we still think that the tightening cycle is now over and that the …
This page has been updated with additional analysis since first publication . Fall in headline inflation keeps another 50bp cut on the cards The decline in inflation in Brazil to 4.8% y/y in the middle of November means that – barring a major surprise in …
28th November 2023
Central bank in “wait and see” mode Israel’s central bank left interest rates on hold at 4.75% again today and the communications continued to emphasise risks to the inflation outlook. But policymakers provided the first hint that an easing cycle could be …
27th November 2023
This page has been updated with additional analysis since first publication . High services inflation will stop Banxico from cutting for now Mexico’s mid-month inflation reading of 4.3% y/y in November provides signs that the disinflation process is …
23rd November 2023
CBRT delivers another large hike, end of tightening in sight Turkey’s central bank (CBRT) delivered another 500bp interest rate hike, to 40.0%, at today’s meeting and suggested that it is very close to the end of the tightening cycle. A final 250bp hike …
This page has been updated with additional analysis since first publication. PMIs consistent with continued recession Despite the rise in the euro-zone Composite PMI in November, it remained consistent with the economy contracting 0.2% in Q4. (See Chart …
Riksbank peaks at 4% The Riksbank’s decision to leave interest rates on hold at 4.0% today was not a major surprise given that financial markets were pricing in only a 10% chance of a hike while economists were evenly split between a hike and a hold. (We …
BI on hold, end of the tightening cycle Bank Indonesia today left interest rates unchanged and the comments from the press conference suggest this marks the end of the tightening cycle. With growth likely to struggle and inflation set to remain weak, …
