Filtered by Topic: Monetary Policy Use setting Monetary Policy
MNB waiting patiently to resume the easing cycle The Hungarian central bank (MNB) left its base rate on hold again today, at 6.50%, and we think that the inflation backdrop will result in less easing over the rest of the year than most expect. Today’s …
28th January 2025
Inflation eases, but Copom still set to deliver 100bp hike next week Brazil’s headline inflation rate eased to 4.5% y/y in the first half of January, but signs that underlying price pressures continued to build mean that Copom will press ahead with …
24th January 2025
Bank of Japan will lift policy rate to 1.25% next year The Bank of Japan hiked its policy rate to 0.5% today and we think it will lift it to an above-consensus 1.25% by the middle of next year. The Bank’s decision to resume its tightening cycle with a …
MAS loosens policy, further easing likely amid low inflation Singapore’s central bank loosened monetary policy today and with inflation likely to remain low and economic growth soft, we expect further easing in the coming quarters. The MAS conducts …
Easing inflation makes February cut highly likely The fall in Mexican inflation in the first half of January, to 3.8% y/y, means that Banxico is likely to continue its easing cycle next month. But with the Fed set to pause its pause its cutting cycle and …
23rd January 2025
250bp cut likely to be follow with another in March The 250bp interest rate cut by Turkey’s central bank (CBRT), to 47.50%, was accompanied by cautious language in the statement. But given signs that underlying inflation pressures are easing , we think …
Norges Bank to start cutting in March Today’s policy announcement confirms that Norges Bank is likely to start cutting interest rates at its meeting in March. We think it will then loosen monetary policy a little more quickly than its latest projections …
Inflation edges up but SARB to continue with cuts in 2025 The smaller-than-expected rise in South Africa’s headline inflation rate, to 3.0% y/y, in December, combined with the recent recovery in the rand, supports our view that the SARB can continue with …
22nd January 2025
Rates on hold (again), prolonged hold likely Bank Negara Malaysia (BNM) today left its main policy rate unchanged at 3.0%, and hinted that it was in no hurry to change rates anytime soon. The decision comes as no surprise – the outcome was correctly …
NBP keeps rates on hold, probably for the whole year The National Bank of Poland (NBP) left its policy rate on hold again today, at 5.75%, and the inflation backdrop is likely to prevent the restart of the easing cycle for some time. We don’t expect …
16th January 2025
Interest rates on hold, but BoK to resume easing cycle soon The Bank of Korea today left its main policy rate unchanged at 3.00%, but we doubt it will be long before the central bank resumes its easing cycle. The decision was correctly predicted by just …
This page has been updated with additional analysis since first publication. Tight labour market bolsters case for RBA to stay put Although we expect the labour market to cool in earnest over the course of this year, risks to our forecast that the …
Inflation continues to accelerate The rise in Russian inflation to 9.5% y/y in December is likely to be followed by an increase to more than 10% early this year. The central bank has set a high bar for further tightening but we think the balance remains …
15th January 2025
Easing cycle to stay on pause amid inflation and fiscal risks The National Bank of Romania (NBR) left its policy rate on hold again today, at 6.50%, amid continued concerns about the inflation outlook and the direction of fiscal policy post-election. We …
Increase in inflation may push CBN to deliver one last 25bp hike The further rise in Nigeria’s headline inflation rate, to 34.8% y/y in December, raises the risk that the central bank pushes ahead with one last interest rate hike at their next meeting in …
This page has been updated with additional analysis since first publication. Soft surprise boosts February rate cut odds While a lot of the surprisingly large fall in services inflation from 5.0% in November to 4.4% in December (CE forecast 4.8%, BoE …
Copom to press ahead with more hikes despite fall in inflation The fall in Brazil’s headline inflation rate in December, to 4.8% y/y, coupled with the rebound in the real over the past couple of weeks, won’t be enough to stop Copom following through with …
10th January 2025
Fall in inflation paves the way for further easing The larger-than-expected fall in Mexico’s headline inflation rate, to 4.2% y/y in December keeps the door open for another 25bp cut at Banxico’s February meeting. But a lot will hinge on moves on the …
9th January 2025
Inflation to continue on its downward path, rate cuts on the way Egypt’s headline inflation rate slowed from 25.5% y/y in November to 24.1% y/y in December, its slowest pace in two years. With earlier falls in the pound falling out of the annual price …
Fed worried by potential impact of Trump policy agenda After Chair Jerome Powell made a big fuss about claiming in last November’s press conference that the Fed wouldn’t speculate about what policies the incoming Trump administration will adopt, the …
8th January 2025
This page has been updated with additional analysis since first publication. EC survey points to economy stagnating and price pressures remaining sticky The EC survey is broadly consistent with euro-zone GDP stagnating in Q4. It also suggests that …
This page has been updated with additional analysis since first publication. Disinflation gathering momentum The RBA is unlikely to pay much heed to the slight pickup in headline inflation in November. In fact, with underlying price pressures showing …
BoI strikes a slightly more dovish tone as rates stay on hold The Bank of Israel (BoI) left its policy rate on hold again today, at 4.50%, but the accompanying communications struck a slightly more dovish tone and we think that it will be in a position to …
6th January 2025
Higher-than-expected inflation in December Data for Germany and Spain suggest euro-zone inflation was higher than expected in December. However, we still think that inflation is likely to undershoot the ECB’s forecasts later this year causing the Bank to …
Fall in inflation points to 250bp rate cut this month The larger-than-expected fall in inflation in Turkey last month, to 44.4%, points towards another 250bp interest rate cut, to 45.0%, at the next central bank meeting on 23rd January. The outturn was …
3rd January 2025
Bank unlikely to cut rates before May The minutes of the RBA’s December meeting struck a slightly dovish tone. However, with the labour market still firing on all cylinders, we doubt the Board will risk loosening policy prematurely. Accordingly, we still …
24th December 2024
Fall in inflation paves the way for further easing The fall in Mexican inflation in the first half of December, to 4.4% y/y, gives Banxico room to continue to ease monetary policy. But we expect Banxico to continue to cut in 25bp steps, rather than step …
23rd December 2024
A rare dovish surprise from the CBR The unexpected decision by Russia’s central bank to leave interest rates on hold at 21.00% today, rather than hike further, sparks a lot of questions about the central bank’s reaction function – and whether it may be …
20th December 2024
Surge in headline inflation won’t last, but underlying inflation to remain near target November’s surge in inflation wasn’t a surprise – the Bank of Japan will have known it was on the cards when it decided not to hike rates yesterday. But it should add …
19th December 2024
Banxico cuts, but pace of easing unlikely to be stepped up Mexico’s central bank unanimously decided to deliver another 25bp interest rate cut, to 10.00%, at today’s meeting and the statement flagged that the easing cycle will continue in the coming …
Easing on pause as the neutral level approaches The Czech central bank (CNB) left its policy rate on hold at 4.00% today, but we think that the easing cycle will resume before long. We still expect rates to fall towards 3.00% by the end of next year. …
For our more detailed analysis of the Bank's December policy announcement, see here . Dovish hold supports our view that rates will be cut further and faster than market pricing While the Bank of England left interest rates at 4.75% today, it struck a …
Riksbank slows pace of cuts, likely to pause loosening at next meeting The Riksbank cut its policy rate by just 25bp today to 2.5% and it is unlikely to cut at its next meeting in January. Further ahead, we now expect just one more 25bp cut next year, in …
Taiwan’s central bank (CBC) left its main policy rate unchanged today (at 2.0%) and with risks to the inflation outlook skewed firmly to the upside we expect rates to remain on hold throughout 2025. In contrast, the consensus is expecting the central bank …
Low inflation in the Philippines to prompt further rate cuts The central bank in the Philippines (BSP) today cut rates by 25bps (to 5.75%) for the third consecutive meeting and signalled that more rate cuts of the same magnitude are likely over the …
Bank will bring in the new year with a rate hike Although the Bank of Japan left rates on hold for a third consecutive meeting, we think it will resume its tightening cycle before long. The Bank’s decision to leave the policy rate unchanged at 0.25% was …
Fed delivers a hawkish rate cut The Fed did cut interest rates by an additional 25bp today, as was largely expected, taking the fed funds rate down to between 4.25% and 4.50%. But the vote was not unanimous and, in a hawkish shift, the new median …
18th December 2024
Currency concerns to keep Bank Indonesia on the sidelines Bank Indonesia today left interest rates on hold at 6.00%, and given worries about the exchange rate we don’t think it will be until the second half of next year at the earliest that it resumes …
BoT to resume easing cycle next year Thailand’s central bank (BoT) today left interest rates unchanged (at 2.25%), but kept the door open to rate cuts next year. With inflation set to stay very low and growth likely to struggle, we are expecting a total …
Rates on hold, new MNB Governor will have little scope to cut in 2025 The Hungarian central bank (MNB) left its base rate on hold again today, at 6.50%, and we think that a rise in inflation in early 2025 will keep rates on hold until at least the new …
17th December 2024
ECB likely to accelerate policy easing next year While the ECB’s decision to cut its deposit rate by 25bp was widely expected, the accompanying statement suggests that policymakers are less concerned than previously about upside risks to inflation and …
12th December 2024
Bumper SNB rate cut, further to come This morning’s 50bp rate cut by the SNB, which brought the policy rate to 0.5%, came as a surprise to most economists. That said, it was balanced by a revised policy statement which implies that policymakers think this …
Fiscal fears and overheating economy trigger a bumper hike Brazil’s central bank stepped up the pace of tightening with a larger-than-expected 100bp hike, to 12.25%, to the Selic rate and made clear that there will be at least two more 100bp increases, to …
11th December 2024
Surging inflation will force another large rate hike The renewed acceleration in Russian inflation to 8.9% y/y in November, and likelihood of further increases in the coming months, argue strongly in favour of another large interest rate hike from the …
50bp cut will not be repeated Although the Bank of Canada cut interest rates by another 50bp today, the accompanying communications were more hawkish than might have been expected, with the Bank no longer indicating that further cuts are guaranteed and …
Rising inflation points to Copom stepping up tightening tomorrow The further rise in Brazil’s inflation rate, to 4.9% y/y, in November alongside the weakness in the real and strong economic growth mean that Copom is nailed on to step up the pace of …
10th December 2024
Disinflation taking hold before sharp easing of price pressures in Q1 This report has been updated with additional analysis since first published. Egypt’s headline inflation rate slowed from 26.5% y/y in October to 25.5% y/y in November and, with falls in …
RBA will only ease policy in Q2 next year The Reserve Bank of Australia today signaled greater confidence that inflation will return towards target over the next couple of years, but we still expect the first rate cut to happen only in Q2 next year. As …
New governor may set a new direction for RBI India’s government has just appointed Revenue Secretary Sanjay Malhotra as the new governor of the Reserve Bank of India (RBI). He will replace the Shaktikanta Das following six years at the helm. The …
9th December 2024
Fall in inflation gives Banxico room to deliver another 25bp cut The fall in Mexico’s headline inflation rate, to 4.6% y/y in November, combined with the relative resilience in the peso since the US election means that Banxico is likely to press ahead …
