Kevin Warsh’s highly anticipated first meeting as Federal Reserve Chair did not fail to live up to expectations. (See our online Drop-In .) The FOMC communicated its decision to leave the federal funds target range unchanged at 3.50%-3.75% in a …
18th June 2026
New MSCI coverage of data centres in the UK and US not surprisingly show the sector strongly outperformed over the past decade. But while returns are still strong in the US, in the UK the sector is now underperforming the all-property average as yields …
Overview – Latin America has been resilient to the energy shock but other headwinds are likely to hold back regional growth to around 2% over the coming years, making it the worst-performing EM region. The political shift to the right could lead to …
The communications following the Czech National Bank’s (CNB’s) decision to hike the policy rate today didn’t commit the MPC to further tightening. But with growth likely to exceed consensus expectations and policymakers concerned about core inflation, we …
Even as optimism builds around AI’s transformative potential, uncertainty about its economic impact is intensifying, from the pace of adoption and distribution of gains to the risks of disruption. This uncertainty also has a critical global dimension: the …
16th June 2026
Weak economic activity in the near term will push euro-zone industrial rental growth to its slowest pace in more than a decade this year. However, we expect rental growth to return to an above-average rate of 3% p.a. over 2027-30 as new supply falls back …
Modest tightening cycle underway The decision by the Czech National Bank (CNB) to hike its policy rate by 25bp to 3.75% marks the start of what is likely to be a modest tightening cycle, with perhaps just one or two more 25bp moves in the cycle. The …
The Bank of England’s repeated pledge that it is “ready to act as necessary” (i.e. hike interest rates), alongside its decision to keep rates unchanged at 3.75%, was no surprise. But provided the US-Iran deal sticks, we doubt the Bank will follow in the …
For updated and more detailed analysis see here . BoE talks a good hawkish game, but is unlikely to deliver The Bank of England’s pledge that it is “ready to act as necessary” by hiking interest rates, alongside its decision to keep rates unchanged at …
Reports that the UAE could have another oil pipeline up and running in 2027 have bolstered hopes of a rapid redrawing of the energy map in the Middle East which would negate Iran’s stranglehold over the Strait of Hormuz. That said, outside of the UAE and …
The SNB left its policy rate unchanged at zero today and we think it will keep rates on hold over the next couple of years. Its commentary shows that the Bank is confident that the current monetary policy setting will keep inflation well within its …
All of our coverage on the Middle East conflict can be found here . The Gulf’s economic recovery can now start The memorandum of understanding (MOU) signed by the US and Iran to extend the ceasefire and re-open the Strait of Hormuz is a major step towards …
CBC to stay on the sidelines Taiwan’s central bank (CBC) left its main policy rate on hold today and the backdrop of rapid economic growth and contained inflation means that we expect it to keep policy settings unchanged for the foreseeable future. …
A sustained rally in Treasuries is, in our view, unlikely over the next year or so, given the macro backdrop and what we’ve heard from the first press conference under the new Fed Chair. New Chair Kevin Warsh got his tenure off to a circumspect start this …
Rates likely to remain unchanged, all eyes on the franc The SNB left its policy rate unchanged at zero today as expected and we think it will keep rates on hold over the next couple of years. Its commentary shows that the Bank is confident that the …
Bank Indonesia today delivered a 25bps hike as it aimed to provide further support to the rupiah and ensure inflation remains contained. The near-term outlook will in large part depend on what happens to the currency, and we think this hike may mark the …
BSP hikes and remains hawkish, but weak economy looms large The Bangko Sentral ng Pilipinas (BSP) hiked interest rates today, by 25bp to 4.75% and the accompanying communications remained hawkish. We expect another 25bp increase in the policy rate at the …
This page has been updated with additional analysis since first publication. Labour market may be starting to stabilise Signs that the labour market may be starting to stabilise makes us a bit less confident in our view that second-round effects won’t …
The pickup in growth last quarter may give the RBNZ cover to begin its tightening cycle in the near term. However, with signs that underlying momentum is weakening, we continue to believe it won’t raise rates above neutral. The 0.8% q/q rise in real …
Copom cuts rates with a dovish twist Brazil’s central bank cut interest rates by another 25bp today, to 14.25%, and the accompanying statement appears to leave the door open to further rate cuts. We think the easing cycle will enter a more stop-start …
17th June 2026
The median projection now points to a clear chance of the FOMC hiking and, with Chair Kevin Warsh stating “we’ve got some work to do on the price stability point”, we continue to expect the Fed to raise interest rates this year. With markets now almost …
Hawkish FOMC members keep rate hikes in play, but probably not until 2027 The median FOMC projection now points to a clear risk of the FOMC hiking this year, but it is likely skewed toward the non-voting hawkish Fed presidents and would probably have …
The fall in oil prices has eased pressure on EM central banks to tighten monetary policy. But the latest CPI data show that inflation is not just being pushed up by energy prices; other components are accelerating too. Historically, these conditions would …
Semiconductor stocks appear increasingly volatile relative to the broader stock market. While that alone is hardly cause for them to underperform, it could become a headwind to them if it continues. The Philadelphia Semiconductor Index plunged by ~6% on …
Don’t bet against the American consumer The strong rise in retail sales in May was far broader than a price-driven increase in gasoline spending, with sales excluding gasoline and underlying control group sales both rising an impressive 0.7% m/m. This …
May’s jump in services inflation was entirely due to Easter timing effects and higher jet fuel prices. Looking ahead, even if it takes some time for the flow of energy through the Strait of Hormuz to get back to normal, energy inflation in the euro-zone …
Downside inflation surprise reduces probability of July hike The smaller-than-expected rise in South African inflation, to 4.5% y/y in May, alongside the drop in oil prices, reduces the likelihood that the Reserve Bank (SARB) follows up May’s 25bp hike …
This page has been updated with additional analysis since first publication. A rise to 4.0% still likely, but chances of a fall to 2.0% next year are growing CPI inflation will still rise over the next six to nine months despite it holding steady at 2.8% …
Despite some warning signs under the hood of the S&P 500’s rally, we aren’t ready to call time on it yet. The market could make further gains, potentially quite large ones, before running into any trouble. Recent large swings in the US stock market, and …
Japan still struggling to secure sufficient crude oil imports The continued plunge in petroleum imports in May undermines the BoJ’s view that Japan has been making progress in securing alternative sources of raw materials but that’s unlikely to prevent …
Our Emerging Markets Chart Pack has been updated to focus on the implications for EMs of the latest developments in the Iran war. If it holds, the US-Iran agreement to re-open the Strait of Hormuz will help to drive a recovery in the Gulf economies and …
The housing market showed firmer signs of improvement in May and, with oil prices dropping back sharply in the past week, there is now a lower chance that the Bank of Canada will be forced to spoil the party by raising interest rates. That lends some …
The effects of the Iran war on the Gulf economies will last well beyond this year’s hit to GDP. The war is likely to incentivise efforts to raise oil supply – and not just via the Strait of Hormuz – which might eventually lead to lower energy prices …
Although MSCI’s ACWI Index of global equities is already more than 7% higher than before the start of the Iran war, this weekend’s fragile peace deal may keep it rallying further in the near term. During the first month of the war, MSCI’s ACWI index …
Multifamily plunge blurs signs of resilience Looking past the volatility in multifamily starts, the latest batch of data suggest the housing market is just about weathering the latest rise in mortgage rates. Housing starts dropped 15.4% m/m to 1.18m …
If the US-Iran deal holds and oil prices remain at their new, lower level, this will swiftly lower fuel inflation. However, this drag on headline inflation would be offset – outside the US, at least – by lagged effects of higher energy prices that are yet …
The extent to which the AI-related rally in stock markets over recent years has been driven by (expected) earnings or valuations depends on how you measure these things. But in general, stocks in places most exposed to AI look expensive versus their peers …
This Focus is an adapted version of a presentation given at the “AI’s global economic shockwaves” event in London on 11 th June 2026. For all of our work on AI, see our dedicated AI page here . AI’s effects so far primarily reflect a boost to demand from …
The valuation of the S&P 500 continues to look very stretched after accounting for the ‘noise’ of the earnings cycle. This is one sign that we may be in the ‘blow-off’ phase of the AI-fuelled rally. Admittedly, a common way of assessing the valuation of …
The Bank of Japan hiked its policy rate to a three decade high today and signalled less concern about downside risks to activity resulting from the Iran War. With inflation set to pick up as higher energy prices feed through, we expect the Bank to lift …
While the Reserve Bank of Australia predictably left rates unchanged today, it clearly signalled that it was far too early for it to declare victory in its battle against inflation. With underlying inflation set to strengthen further in the coming months, …
A hawkish hold from the RBA The Reserve Bank of Australia retained policy optionality when it kept rates unchanged at its meeting today. Our base case remains that the Bank’s tightening cycle has a little further to run. The RBA’s decision to leave rates …
Bank of Japan will lift rates to 2% next year The Bank of Japan lifted its policy rate to a three decade high today and we expect the Bank to accelerate the pace of tightening over the coming months. The Board’s decision to lift its policy rate from 0.75% …
Domestic demand still struggling The May activity data show that strong exports are boosting industrial production, but domestic demand remains lacklustre. Industrial output expanded by 4.5% y/y, up from 4.1% in April. (See Chart 1.)However, it’s worth …
Upward revisions keep manufacturing momentum intact The weaker-than-expected unchanged manufacturing output reading in May suggests the sector is not entirely immune to elevated oil prices, despite the structural tailwind from the AI buildout. …
15th June 2026
Decent manufacturing performance extends beyond oil sector The 1.8% m/m rise in manufacturing sales volumes in April was not solely down to the oil sector, feeding the narrative that a nascent recovery in the manufacturing sector is underway and …
There is a lot of uncertainty about how the energy market and prices will evolve once an agreement is officially signed between the US and Iran. This Update highlights five key factors to watch in energy markets over the coming weeks and months. 1) Tanker …
Rates on hold, but too soon to call the end of the tightening cycle The decision by Pakistan’s central bank (SBP) to leave interest rates unchanged at 11.50% is a bit of a surprise given the sharp rise in inflation in recent months, and we doubt this …
The deal agreed over the weekend to end the war between the US and Iran will, if it holds, support a gradual recovery in the Gulf economies over the coming quarters. But the hit to output that has already happened will result in large falls in GDP across …
