Filtered by Topic: Monetary Policy Use setting Monetary Policy
Leadership alters formal characterisation of monetary policy The Politburo has just concluded its December meeting, which focuses foremost on economic affairs. After 14 years of monetary policy being officially characterised as “prudent”, the meeting …
9th December 2024
Repo rate cuts to begin in April The Reserve Bank of India’s decision to keep the repo rate unchanged at 6.50% today highlights its unease at the current rate of headline inflation. We think inflation has now peaked and indeed, the lowering of the cash …
6th December 2024
NBP leaves rates on hold, little scope for easing in 2025 The National Bank of Poland (NBP) left its policy rate on hold again today, at 5.75%, and a rise in inflation over the coming months means that the monetary easing cycle won’t resume until the …
4th December 2024
Rate cut in December may be jumping the gun The smaller-than-expected decline in Turkish inflation in November, to 47.1% y/y, suggests to us that a monetary easing cycle probably won’t start later this month as many analysts seem to be expecting. We …
3rd December 2024
This page has been updated with additional analysis since first publication. Inflation data make 50bp December cut less likely The continued strength of euro-zone services inflation in November reduces the chance that the ECB will cut interest rates by …
29th November 2024
Rebalancing underway The 0.2% q/q contraction in the Turkish economy in Q3 suggests that policymakers’ efforts to weaken demand and tame high inflation are taking effect. We still think that it would be premature for the central bank to start an easing …
This page has been updated with additional analysis since first publication. EC Survey consistent with economy stagnating The EC survey was little changed in November and is still consistent with weak growth at best, while the price components suggest …
28th November 2024
Interest rates cut, further easing ahead The Bank of Korea cut interest rates today by 25bps (to 3.00%) for a second meeting in a row. We were one of the few analysts to correctly predict a cut, with 34 out of 38 forecasters polled by Reuters expecting …
RBNZ will cut rates by another 50bp in February The RBNZ didn’t provide a clear signal about the speed of future rate cuts when it lowered the overnight cash rates by 50bp today, but we think it will deliver another 50bp cut at its February meeting. The …
27th November 2024
Fed slows pace of rate cuts The minutes of the Fed’s early-November FOMC meeting, when it slowed the pace of policy loosening with a smaller 25bp cut, tell us little about whether to expect another smaller quarter-point cut at the upcoming policy meeting …
26th November 2024
25bp hike probably the last of this cycle The Central Bank of Nigeria opted for a smaller-than-expected hike in its policy rate of 25bp to 27.50%, at its meeting today and, with Governor Cardoso sounding optimistic that the effects of petrol price hikes …
Inflation jumps, Selic heading higher The rise in Brazil’s headline inflation rate, to 4.8% y/y, in the first half of November was partly driven by a further increase in underlying core services inflation and means that Copom is likely to raise the Selic …
BoI on hold as upside inflation risks remain The Bank of Israel (BoI) left its policy rate on hold again today, at 4.50%, and the accompanying communications suggest that the risk of a return to interest rate hikes has receded over the past month. Even …
25th November 2024
Fall in inflation leaves door open for December cut The larger-than-expected fall in Mexican inflation in the first half of November, to 4.6% y/y, alongside easing core price pressures and the relative resilience in the peso mean that Banxico is likely to …
22nd November 2024
Interest rate cuts still a few months away (at least) The communications accompanying the decision by the Turkish central bank (CBRT) to leave its policy rate unchanged again today, at 50.00%, suggest that analysts’ expectations for an easing cycle to …
21st November 2024
Sharp drop in inflation sets the stage for 25bp cut tomorrow The drop in South Africa’s headline inflation, to 2.8% y/y, in October, will make it harder for the SARB to strike a hawkish tone regarding inflation pressures at its monetary policy committee …
20th November 2024
Policy easing to resume in the second half of next year Bank Indonesia today left interest rates on hold at 6.00%, and we don’t think it will be until the second half of next year that the central bank resumes its easing cycle. The decision was broadly …
This page has been updated with additional analysis since first publication. Surprisingly big rebound suggests BoE will leave rates at 4.75% in December October’s surprisingly large rebound in CPI inflation from 1.7% to 2.3% (CE 2.1%, consensus & BoE …
Recession not enough for MNB to resume easing The Hungarian central bank (MNB) left its base rate on hold again today, at 6.50%, despite the economy having just fallen back into recession. We think that the easing cycle will remain on pause over the next …
19th November 2024
RBA still in “wait and watch” mode With the RBA maintaining its neutral stance, we’re sticking to our view that the Bank won’t begin cutting rates before Q2 2025. The minutes of the RBA’s November meeting confirmed that the decision to leaves interest …
Inflation jump to prompt 100bp hike from CBN this month Nigeria’s headline inflation picked up for a second consecutive month, to 33.9% y/y in October, largely due to the impact of rising petrol prices. The CBN now appears to have little choice but …
15th November 2024
Banxico cuts, scope for further easing rests on the peso Mexico’s central bank delivered another 25bp interest rate cut at today’s meeting, to 10.25%, and it left the door open to further easing over the coming months, although a lot will depend on moves …
14th November 2024
This page has been updated with additional analysis since first publication. Resilient labour market heightens risk that policy easing will be delayed With the labour market still on sturdy ground, there is a growing risk to our forecast that the RBA will …
Growth slowing, but inflation pressures still strong The slowdown in Russian GDP growth in Q3, to 3.1% y/y, is likely to be followed by a further loss of momentum in growth over the coming quarters. But, alongside CPI data which show that inflationary …
13th November 2024
Inflation jump scuppers December rate cut hopes Another bigger-than-expected jump in headline consumer price inflation last month will be enough to convince a majority of MPC members that conditions are not yet right to begin easing policy. We now think …
12th November 2024
Easing cycle on pause, waiting for more clarity on fiscal policy The National Bank of Romania (NBR) left its policy rate on hold again today, at 6.50%, against a backdrop of stubborn above-target inflation and concerns about the loose fiscal stance ahead …
8th November 2024
Inflation rises, more rate hikes on the cards The further rise in Brazil’s headline inflation rate to 4.8% y/y in October means that the central bank is almost certain to deliver additional interest rate hikes at its upcoming meetings. The risks are …
Fed slows pace of rate cuts As expected, after a run of stronger activity and inflation data since it started its rate cutting cycle with a 50bp reduction in mid-September, the Fed opted for a more modest 25bp cut at the conclusion of its two-day FOMC …
7th November 2024
Easing cycle to continue, but risk of slower pace of cuts The Czech National Bank (CNB) cut its policy rate by 25bp again today, to 4.00%, and we still think that the conditions will be in place for the policy rate to be lowered to its estimated neutral …
Watch a recording of our post-MPC online briefing here . Budget means Bank may not cut rates as fast and far While cutting interest rates from 5.00% to 4.75% today, the Bank of England implied that the Budget means rates will continue to fall only …
Easing core inflation and peso recovery leave 25bp cut in play The larger-than-expected rise in Mexico’s headline inflation rate, to 4.8% y/y in October, was driven entirely by a jump in agricultural price inflation. Core inflation edged down last month …
Riksbank increases pace of cuts, but doesn’t change its terminal rate forecast The Riksbank cut its policy rate by 50bp today to 2.75%, but the accompanying policy statement suggested that it plans only two more 25bps rate cuts to take it to a …
Copom hikes again Brazil’s central bank hiked the Selic rate for a second consecutive meeting, by 50bp to 11.25%, today but this has more to do with the domestic macro backdrop and shoring up monetary policy credibility than a response to the market …
6th November 2024
NBP leaves rates on hold, risks to our rate forecast shift up slightly The decision by the National Bank of Poland (NBP) to leave its policy rate on hold again today, at 5.75%, was never in doubt, and we think that interest rate cuts are unlikely to …
Rates on hold, set to remain unchanged 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 predicted …
RBA will cut rates early next year Although the Reserve Bank of Australia maintained a broadly neutral tone at its meeting today, we still think it start to lower interest rates as soon as February next year. The Bank’s decision to leave rates unchanged …
5th November 2024
Dovish central bank hints at further rate cuts The State Bank of Pakistan (SBP) lowered its policy rate today by a further 250bps (to 15.0%) and sounded more dovish than it has done in previous meetings. Today’s cut marks the fourth consecutive meeting …
4th November 2024
Another upside surprise likely to reenforce CBRT’s hawkish stance The smaller-than-expected fall in Turkish inflation in October, to 48.6% y/y, is likely to dash any remaining hopes that a monetary easing cycle will start this year. The risks now seem …
Bank of Japan will hike rates at December meeting The Bank of Japan retained its hawkish outlook when it kept policy unchanged at today’s meeting and we still expect a rate hike to 0.5% at its next meeting in December. It came as no surprise that the Bank …
31st October 2024
November rate cut hinges on US election The stronger-than-expected 1.0% q/q expansion in Mexico’s economy in Q3 confirms that the economy pulled out of the slump seen in the first half of the year last quarter. We still think the conditions are …
30th October 2024
RBA still on course to cut rates in Q1 2025 Today’s CPI release suggests that underlying inflation will be within striking distance of the RBA’s 2-3% target range by year-end. That should pave the way for the Bank to begin easing policy at its meeting …
Surprise 200bp hike takes policy rate to a new high The decision by the Russian central bank (CBR) to hike its policy rate by a larger-than-expected 200bp today, to 21.00%, is evidence that – despite President Putin’s efforts at this week’s BRICS summit …
25th October 2024
Banxico’s space to cut hinges on US election The fall in Mexican core services inflation in the first half of October in principle gives Banxico space to press ahead with another 25bp rate cut next month, but much will hinge on the outcome of the US …
24th October 2024
This page has been updated with additional analysis since first publication. Flash PMIs support case for 50bp rate cut The low activity and price components of the flash PMIs for the euro-zone in October will strengthen the conviction of policymakers who …
50bp cut likely to be followed by another The weak economic backdrop means there is a strong case for the Bank of Canada to follow its larger 50bp cut today, which took the policy rate to 3.75%, with another 50bp move at the next meeting in December. Our …
23rd October 2024
Sharp drop sets the stage for 25bp rate cut in November The drop in South Africa’s headline inflation rate, to 3.8% y/y, in September, means that the SARB will almost certainly continue its easing cycle. The chances of a 50bp cut at its the next meeting …
MNB pauses easing cycle again The Hungarian central bank (MNB) acknowledged the possibility that interest rates could be left on hold for an “extended period” after it paused its easing cycle today. We maintain our forecast that the policy rate will be …
22nd October 2024
Retail sales collapse in September, but weakness probably temporary The much weaker-than-expected Polish retail sales data for September suggest that the economy slowed more than we had been expecting in Q3. Even so, we think that this weakness was …
The PBOC continues to support the economy Today’s reductions to both the one-year and five-year Loan Prime Rates (LPR) continue the PBOC’s efforts to support the economy. We expect additional easing to follow in the coming quarters, but this is unlikely …
21st October 2024
25bp rate cuts likely to keep coming Alongside its decision to cut interest rates by 25bp, the ECB stuck to its guidance about data dependence and making decisions on a meeting-by-meeting basis. But the press release also acknowledged the recent weakness …
17th October 2024
