Filtered by Topic: Monetary Policy Use setting Monetary Policy
The central bank in the Philippines (BSP) cut interest rates by 25bp today, and further interest rate cuts seem only a matter of time. Given the subdued outlook for inflation and the dovish nature of today’s comments from the BSP, policy easing this year …
9th May 2019
Today’s decision by the Norges Bank to leave its policy rate on hold at 1.00% is just a brief pause in its tightening cycle, with another hike now almost certain in June. With core inflation set to remain above target this year, we have a further rate …
Copom’s statement from last night’s meeting highlighted that policymakers are not troubled at all by the recent jump in inflation and, rightly in our view, see it as temporary. If anything, they are more concerned about the weakness of the activity data. …
The slowdown in credit growth last month underlines the need for further monetary policy easing in order to keep credit expanding fast enough to provide a floor to economic growth. … Bank Lending & Broad Credit …
If the ECB re-starts QE next year, as we think is likely, the resulting upward pressure on the Swiss franc would stoke deflationary fears at the Swiss National Bank (SNB) and prompt a policy response. We expect the SNB to step up its currency …
8th May 2019
Despite the downbeat outlook for Thailand’s economy, the central bank (BoT) left interest rates unchanged at its meeting today. Continued concerns over risks in the financial sector mean that it is unlikely to join other central banks from the region in …
We expect policymakers in Norway, Switzerland, Iceland, and Sweden to all leave interest rates unchanged at their next policy meetings over the coming weeks and months. In the case of the Norges Bank, we suspect that this will just be a pause in its …
Subdued economic growth and a softening labour market mean that today’s interest rate cut by the Reserve Bank of New Zealand will be repeated before the year is out. … New Zealand - RBNZ will cut again before the year is …
This Briefing is a reference guide with our latest views and forecasts for the Euro-zone economy, including the prospects for key macroeconomic and financial market variables such as gross domestic product, wages, the exchange rate and interest rates. … …
7th May 2019
This Briefing is a reference guide with our latest views and forecasts for the UK economy, including the prospects for key macroeconomic and financial market variables such as gross domestic product, wages, the exchange rate and interest rates. … United …
With economic growth likely to remain weak throughout 2019, today’s 25bps rate cut by the central bank in Malaysia (BNM) is likely to be followed by further easing later in the year. … Another cut likely in Malaysia before …
The Reserve Bank of Australia made only the slightest downward revisions to its forecasts when it left interest rates unchanged at 1.50% today. But it noted that further improvements in the labour market will be needed for meeting its inflation target, …
Headline consumer price inflation is likely to have risen in April due to another pick up in food inflation. However, it will have remained below the RBI’s 4.0% target. That will be enough to prompt the central bank to cut policy rates again, perhaps as …
President Trump has threatened an imminent expansion of tariffs against China. We expect this to result in stronger headwinds to growth, more policy easing, a weaker renminbi and a stock market rout. … Four implications of the re-escalation in trade …
6th May 2019
Bank lending to small firms should receive a sizeable boost from the planned reduction in the required reserve ratio for many rural banks, pushing up overall bank loan growth in the process. While this won’t provide an immediate prop to growth, it should …
President Donald Trump was at his trolling best earlier in the week when he tweeted shortly before the FOMC meeting that the Fed should cut interest rates by 1% point and restart quantitative easing. But the incoming data suggest he might just have a …
3rd May 2019
This Briefing is a reference guide with our latest views and forecasts for Turkey’s economy, including the prospects for key macroeconomic and financial market variables such as gross domestic product, wages, the exchange rate and interest rates. … …
The most surprising news from the Bank of England’s Inflation Report this week was not the suggestion that interest rates need to rise more quickly than the markets currently anticipate, but the strength of the message. Governor Carney was unusually …
The Turkish central bank’s messaging to investors has become even more confused over the past week and the institution’s damaged credibility means that it will be even more difficult for policymakers to make the case for interest rate cuts in the future. …
Negative interest rates in Denmark, Switzerland, and Sweden impose costs on their respective banking sectors, but the overall burdens are very small – well below 0.1% of bank assets in all cases. Accordingly, concerns about these costs will not prevent …
2nd May 2019
The interest rate hike at today’s monetary policy meeting probably marks the end of the Czech National Bank’s tightening cycle. While we think that the currency will fail to appreciate by as much as the central bank anticipates, weakness in the euro-zone …
Even after the announcement of the six-month Brexit delay, there was never much chance that the MPC would raise interest rates from its current rate of 0.75% with the possibility of a no deal Brexit still hanging over the economy. But the hawkish tone of …
This Briefing is a reference guide with our latest views and forecasts for Indonesia’s economy, including the prospects for key macroeconomic and financial market variables such as gross domestic product, wages, the exchange rate and interest rates. … …
We expect the recent string of soft economic data will be enough for the Reserve Bank of New Zealand (RBNZ) to cut rates to 1.50% when it meets next week on Wednesday 8th May. Since the RBNZ shifted to an easing bias in March the economic data have …
Although the FOMC left the target for the fed funds rate unchanged at between 2.25% and 2.50% today, as expected, it unveiled a slightly unexpected 5bp cut in the interest on excess reserves (IOER) rate. As Fed Chair Jerome Powell explained in his press …
1st May 2019
The National Bank of Romania’s decision to maintain strict control over money market liquidity marks a step in the right direction to addressing the large build-up of economic imbalances. But we think that these vulnerabilities will persist, prompting the …
The economic outlook has deteriorated in both Australia and New Zealand. In Australia, the downturn in the housing market and falling business confidence should mean that GDP growth will continue to soften. In New Zealand, we expect GDP growth to remain …
30th April 2019
We suspect that the sharp fall in underlying inflation in the first quarter will be enough to prompt the Reserve Bank of Australia (RBA) to cut interest rates to 1.25% on Tuesday 7th May. And given that we expect the labour market to start slackening …
29th April 2019
There was never any doubt that the Bank of Canada would keep policy unchanged when it met earlier this week, although its decision to drop any reference to future interest rate hikes from its policy statement appeared to take investors by surprise. … …
26th April 2019
There were plenty of positive headlines for the US economy this week, with GDP growth accelerating in the first quarter, durable goods orders surging in March, and the S&P 500 hitting a record high. But signs of underlying weakness abound which, together …
For now, the Riksbank is in the peculiar position of trying to ease and tighten policy at the same time. But with economic growth and core inflation set to remain subdued, we expect policy tightening to ultimately be kicked down the road. If anything, the …
While the next Governor of the Bank of England may change lots of things within the Bank, the economic data will remain the biggest driver of monetary policy. And if Labour won the next general election and changed the Bank’s mandate, that would have a …
The dovish nature of the Russian central bank’s post-meeting statement has prompted us to bring forward the interest rate cut that we had pencilled in for Q3 to June. Further ahead, we forecast that the benchmark one-week repo rate will be lowered from …
The easing in underlying inflation this week prompted a sharp decline in market interest rate expectations. That makes sense because an equally weak inflation print prompted the RBA to cut interest rates three years ago despite continued improvements in …
High global oil prices have in the past contributed to worryingly-large current account deficits in India but prices would have to rise much higher than they have recently for that to return as a risk. Domestically, we doubt the government would cut …
If the Monetary Policy Committee (MPC) wanted to raise interest rates from 0.75%, the six-month Brexit delay provides it with a window to do so. More likely, though, is that the MPC remains in a state of inertia at the meeting on Thursday 2nd May and for …
25th April 2019
The Turkish central bank’s decision to leave interest rates on hold at today’s meeting was widely expected, although changes to the accompanying statement suggest that the MPC is starting to consider easing policy. We think that the scope for interest …
Bank Indonesia (BI) left rates unchanged at 6.0% at its meeting today and there was little indication in the statement that it is likely to adjust monetary policy anytime soon. We expect rates to remain on hold throughout this year. … Indonesia: rates to …
The dovish shift in the Riksbank’s policy stance is a step in the right direction. But with economic growth and core inflation set to remain subdued over the coming years, we still think that policymakers and investors are overestimating the potential for …
The Bank of Japan made it very clear that it will keep policy settings loose for at least another year. And while we expect GDP growth and inflation to disappoint, we think that concerns about the impact of loose policy on financial stability will prevent …
By dropping any reference to future rate hikes today, the Bank delivered its most dovish policy signal in two years. While the Bank remains optimistic about economic prospects in the second half of the year, we think that its forecasts for growth to …
24th April 2019
Turkey’s central bank seems to react like clockwork by tightening monetary policy when the lira falls sharply, but other EM central banks respond much less frequently than is commonly believed. Most will only tend to respond to a currency fall when this …
The Fed will leave interest rates unchanged at its upcoming policy meeting. Chair Jerome Powell may acknowledge in his post-meeting press conference that downside risks to the outlook are fading. But the overall tone is still likely to be dovish, not …
The six-month delay to Brexit until 31st October 2019 has put the brakes on interest rate hikes and left the economy travelling in the middle lane, with GDP likely to rise by 1.5% this year. But should a Brexit deal be struck in October, which is our …
Regional GDP growth is set to slow to its weakest pace since 2015 this year and our forecasts for most countries are below consensus. Weakness in the euro-zone will weigh on the highly-open economies of Central Europe, while growth in Russia is likely to …
India’s mammoth general election that began earlier this month is now past the halfway stage. Votes have been cast in 302 out of the country’s 543 constituencies, with four days earmarked for further voting to take place before results are announced on …
The softening in underlying inflation puts increasing pressure on the RBA to cut interest rates. We still expect the RBA to cut rates in August but the risks of an earlier cut have increased. … Consumer Prices …
Polish inflation is likely to rise over the coming quarters, but we don’t think that will prompt a policy response. With growth set to slow next year and the ECB likely to relaunch QE, we expect that the Polish MPC will keep interest rates unchanged right …
23rd April 2019
There are tentative signs that US and global manufacturing may be stabilising, but the latest surveys suggest that activity in the domestic-focused services sector is weakening. … Services slipping as manufacturing …
22nd April 2019
A slew of data releases this week presented mixed signals for the Bank of Canada ahead of next week’s policy meeting. Although core inflation has picked up and the economy probably performed a bit better in the first quarter than the Bank was expecting, …
18th April 2019
