Filtered by Topic: Monetary Policy Use setting Monetary Policy
ECB will reiterate plan to end asset purchases in third quarter… …but will acknowledge that inflation is much higher than expected. We think it will raise the depo rate as soon as July and lift it to +0.25% by year-end. The Governing Council is likely to …
7th April 2022
Evidence is mounting that more rate hikes will be needed Bank to hike rates by 50bp in April and May, 3.0% by end 2022 But we think the Bank will eventually have to reverse course, cutting rates next year Inflation is set to exceed the RBNZ’s forecasts …
GDP growth and inflation continue to outperform Bank’s forecasts Bank set to accompany 50 bp hike with start of quantitative tightening We now expect the policy rate to reach 2.0% by the fourth quarter We now anticipate that the Bank of Canada will raise …
6th April 2022
Dovish MPC commentary suggests rates will stay on hold next week But inflation is likely to become more of concern over the coming months Repo rate likely to rise by more than the consensus expects this year Since the outbreak of the war in Ukraine, MPC …
30th March 2022
War in Ukraine will not prevent policy tightening as inflation remains elevated. In the past, tightening cycles have tended to end in recession. But soft landings are achievable and delaying now would increase future risks. The war in Ukraine has worsened …
23rd March 2022
The Norges Bank will kick off the post-Olsen era next Thursday with a 25bp interest rate hike, to +0.75%, and while we expect it to raise rates three more times this year, the balance of risks is skewed towards it proceeding even faster. Meanwhile, …
17th March 2022
War in Ukraine worsening the tricky mix between rising inflation and slowing GDP growth Rising price expectations to force MPC to raise interest rates by 25bps A tight labour market may mean that rates rise to 2.00% next year The economic consequences of …
10th March 2022
War in Ukraine will lift inflation above 2% But Bank has made clear it will look through transitory, cost-push inflation Kishida will probably appoint a continuity candidate to replace Kuroda While the war in Ukraine will lift Japanese inflation to the …
We expect five 25bp rate hikes this year and another four next year War in Ukraine doesn’t alter policy outlook Fed likely to downplay inflationary impact of energy price surge We expect the Fed to hike interest rates by 25bp at next week’s FOMC meeting …
9th March 2022
ECB will stress caution and flexibility in light of Ukraine war. New ECB forecasts will show lower growth, much higher inflation. Policymakers will still plan to resume normalisation when and if the situation is clearer. At next week’s monetary policy …
3rd March 2022
Bank sent heavy hint that March rate hike was likely Set to accompany 25 bp hike with start of quantitative tightening With inflationary pressures broadening, Bank to follow with another hike in April We expect the Bank of Canada to kick off its …
23rd February 2022
Inflation set to surge further; first rate hike will come in June. High household debt is a concern, but high savings rate means households have buffers. We expect rates to reach 1.75% by mid-2023. We now expect the RBA to start hiking in June in response …
Strong data will keep the RBNZ’s hiking cycle on track The Bank will hike rates to 2.0% by August But we think the Bank will eventually have to reverse course, cutting rates next year The New Zealand economy remained hot at the end of last year. And while …
16th February 2022
Inflation risks might spur an aggressive policy action similar to that of the mid-1990s. But this would be unusual and there are very good reasons for caution. Even those banks that start out fast will slow the pace before long. Monetary policymakers are …
10th February 2022
While the Riksbank is likely to leave the repo rate unchanged at zero next Thursday (10 th February), a hawkish shift is now long overdue. We have pencilled in a 25bp repo rate hike in November 2022, which is ahead of the economic consensus, but there is …
3rd February 2022
We are forecasting a hike in the reverse repo rate next week as Omicron fears fade Repo rate hikes to follow before long as inflation rises above the RBI’s target Repo rate likely to rise by more than the consensus expects this year After months of …
The unfavourable growth/inflation trade-off has worsened We think investors are right to price in an interest rate hike in February to 0.50% And we expect rates to rise to 1.25% by end-2022, further than most anticipate The further surge in inflation …
27th January 2022
Omicron, market sell-off and Ukraine tensions won’t worry the ECB unduly. Lagarde to stress uncertainty over inflation and note rapid house prices increases. We think the Bank will prepare the ground for limited rate hikes next year. The impact of Omicron …
Labour market tightening rapidly, inflation surging Omicron is disrupting activity but will only add to the upward pressure on prices RBA to end QE next week, start hiking in August The rapid tightening of the labour market coupled with the acceleration …
25th January 2022
Inflation was lower than Bank expected in Q4 and Q1 GDP growth is set to be weak Bank nevertheless set to turn more hawkish amid signs of surge in wage growth ahead Bank to use policy statement to tee up rate hike at the next meeting in March Amid growing …
19th January 2022
Fed usually flags start of tightening cycle ahead of time Balance sheet run-down likely to come sooner and be more aggressive than 2017/18 FOMC will have more hawkish tilt until Biden’s nominees are confirmed With many Fed officials now either explicitly …
Norwegian policymakers will keep interest rates on hold, at +0.50%, next Thursday, before resuming their tightening cycle in March. We forecast one rate hike per quarter this year, which is one more than investors have currently priced in over the period. …
13th January 2022
Omicron supply chain disruption won’t lift consumer inflation much Balance sheet to shrink gradually, but that won’t cause tighter monetary conditions Bank still views weaker yen as positive and won’t respond with tightening While Omicron is likely to …
12th January 2022
Most central banks will raise interest rates next year. But in some cases, interest rates may not rise by as much as markets are anticipating. And the People’s Bank of China will cut interest rates further. With underlying inflation set to stay …
21st December 2021
Bank to raise 2022 inflation forecast but still predict an undershoot in 2023. Policymakers will keep open possibility of using the PEPP after March. Christine Lagarde will stress uncertainty and need for flexibility. Just a day after we expect the Fed to …
9th December 2021
Emergency lending facility and corporate debt buying scheme to be extended Risks to inflation posed by worst-case Omicron scenario balanced Upside inflation surprise wouldn’t cause Bank to lose control of the yield curve While renewed virus restrictions …
A hike this month does not look likely, but is possible Omicron is unlikely to prompt more QE or negative interest rates Lift off to occur early next year, but rates probably won’t rise as far as investors expect We wouldn’t completely rule it out, but we …
Omicron means that a Norges Bank rate hike next Thursday is no longer as nailed on a prospect as it once was, but we still think that policymakers will decide to raise rates to +0.50%. Meanwhile, although the SNB has let the franc rise in recent weeks, it …
Fed markedly shifts stance, with inflation no longer seen as transitory Taper will be stepped up – asset purchases to end in spring rather than summer We now expect two hikes in 2022, followed by four hikes in 2023 In sharp contrast to the surprisingly …
8th December 2021
Economy a bit stronger than expected but BC floods and Omicron are downside risks Bank to keep forward guidance on policy rate unchanged despite rising wage growth We do not expect the Bank to significantly alter its monetary framework later this month …
1st December 2021
MPC likely to stand pat next week as Omicron fears build Committee likely to announce further measures to drain bank liquidity… …laying the groundwork for policy rate hikes from mid-2022 Whereas many EM central banks have been hiking rates aggressively, …
Economy rebounding rapidly from lockdowns Inflation and wage growth set to surprise to the upside RBA to end QE in August; first rate hike in early-2023 The rapid rebound in activity from the recent lockdowns coupled with a further pick-up in underlying …
30th November 2021
The Riksbank is all but certain to leave its policy settings on hold next week. But against a backdrop of above-target inflation and the broader hawkish shift by policymakers elsewhere, we expect it to dial down the dovishness a bit and to perhaps further …
18th November 2021
New Zealand economy is running red hot RBNZ will hike by 50bps next week OCR will rise to 2.0% by the middle of next year The New Zealand economy is clearly overheating. Measures of underlying inflation are mostly above the ceiling of the RBNZ’s target …
17th November 2021
Investors may be right that the MPC will hike rates in November or December But we think they are wrong to price in rates rising as far as 1.25% by end-2022 Our new forecast is for rates to rise to 0.50% by February, but no higher next year We now think …
28th October 2021
Fed to announce $15bn per month asset purchase taper beginning in November Statement may reveal growing concern about higher inflation… …but we still expect weaker GDP growth to delay rate hikes until 2023 The Fed is set to announce at next week’s FOMC …
27th October 2021
Underlying inflation strongest in years, but wage growth has yet to pick-up RBA to shift forward guidance for first rate hike to 2023 in February, ditch yield target We think the first hike will happen in early-2023 The acceleration in underlying …
ECB will acknowledge upside risk to inflation but say the rise is mostly temporary. The Bank will also push back against expectations for a rate hike next year. The bigger decisions on future asset purchases will be delayed until December. Nobody expects …
21st October 2021
Strong employment gains should be enough for Bank to call time on QE Labour shortages suggest Bank is overestimating the degree of economic slack But with wage growth low, unlikely to bring forward plans for rate hikes We expect the Bank of Canada to call …
New PM Kishida won’t touch yield curve control Weaker yen unlikely to faze Governor Kuroda Near term growth forecasts to be revised down on supply shortages Sitting comfortably with continuity candidate PM Kishida in charge, the Bank of Japan won’t alter …
Concerns that price pressures will become sustained have prompted a hawkish shift. We have brought forward anticipated rate hikes in the US, UK and some EMs. But we doubt that tightening will go as far as most central banks have implied. There has been a …
29th September 2021
RBI likely to keep rates on hold next week as inflation pressures eases Admittedly, some liquidity draining measures could be announced… …but these are likely to be marginal tweaks rather than signs of policy tightening Policy rates are highly likely to …
New Zealand has eased its strict lockdown RBNZ still keen to lift rates in October Rates will be gradually raised to 1.50% by the middle of next year New Zealand has slowed the spread of the Delta variant and eased its lockdown, which stopped the RBNZ …
Labour market should cope well with impact of lockdowns Slump in net migration means that staff shortages won’t ease soon Wage growth still set to accelerate next year, paving way for rate hikes in early-2023 With the latest lockdowns set to end next …
28th September 2021
MPC’s position that interest rate hikes are on the horizon won’t have changed But the weak near-term growth outlook means that a rate rise is unlikely soon We think that Bank Rate will remain unchanged at 0.10% until 2023 The Monetary Policy Committee …
16th September 2021
LDP leadership favourite Kono Taro may set his sights on shrinking BoJ balance sheet Next PM likely to be involved in choosing Governor Kuroda’s successor Both short- and long-term policy rates won’t be touched any time soon Dug in for an extended hold, …
ECB likely to signal that it will reduce its weekly PEPP purchases in the months ahead. But we think it will leave interest rates unchanged until beyond 2025. The Bank will also nudge up its inflation and growth forecasts for this year. The ECB is likely …
2nd September 2021
Acceleration in vaccine rollout means lockdowns unlikely to last much longer RBA will probably press ahead with tapering However, Bank unlikely to tighten as early as next year as financial markets expect The health situation in Australia continues to …
1st September 2021
The New Zealand economy is now overheating The RBNZ will hike rates by 50 basis points in August OCR may reach 1.50% by the middle of next year The New Zealand economy is clearly overheating and the Bank’s mandates for both inflation and the labour market …
11th August 2021
RBI likely to keep rates on hold next week as inflation pressure looks set to ease Central bank will underline its commitment to supporting the economic recovery Policy normalisation will happen only very gradually, and not until well into next year …
29th July 2021
