Category: Central banks news

As further QE tapering to CAD 1B/week has been fully priced in, the focus of this week’s BOC meeting is the forward guidance on rate hike. The market has priced in 3 rate hikes in 2022. We expect the central bank to maintain the guidance that a rate hike would come when “economic slack is …

BOC Preview – Further QE TaperingRead More

At the FOMC minutes for the September meeting, the members sent more hints about QE tapering. It is highly likely a formal announcement will  be made in November, barring abrupt deterioration of pandemic condition and power shortage problems. On economic developments, the Fed acknowledged that “economic activity had continued to expand in recent months, though …

FOMC Minutes: QE Tapering can Come in As Soon As Mid-NovemberRead More

For the first time in 7 years, the RBNZ increased the OCR by +25 bps to 0.5% in October. Policymakers pledged to tighten further in coming months as inflation pressure continues to exceed target. Policymakers remained hopeful about the economic outlook, suggesting that easing of pandemic-related restrictions could help return growth momentum. On economic developments, …

RBNZ Hiked Policy Rate for First Time in 7 YearsRead More

The RBA left the cash rate unchanged at 0.1%, and asset purchases at AUD 4B/month, in October. Despite sharp rise in housing prices, policymakers chose to stick with ultra-easy monetary policy in order to achieve the inflation target and full employment. The central bank remained cautiously optimistic about the economic outlook. Policymakers acknowledged that “the …

RBA Affirmed No Rate Hike Until 2024, Widening Policy Divergence with CounterpartsRead More

The RBA will maintain all monetary policy measures unchanged at next week’s meeting. That is, the cash rate, as well as the yield target on the April 2024 bond, will stay at 0.1%. Asset purchases will also be kept at a pace of AUD 4B/week. Policymakers will continue to warn of the slowdown in the …

RBA Preview – To Maintain Rate at Historical as Counterparts Begin TighteningRead More

The RBNZ is almost certain to raise the OCR by +25 bps to 0.5% next week. The Funding-For-Lending program (FLP) will stay unchanged at NZ$28B. This should not be affected by the slowdown in economic activities in the third quarter. While cautioning about the uncertainty of the pandemic and economic damage brought about by the …

RBNZ Preview – Rate Hike Cycle BeginsRead More

The BOE voted 9-0 to leave the Bank rate at 0.1% at the September meeting. The members voted 7-2 to keep the QE program at 895B pound. Deputy governor Dave Ramsden and external member Michael Saunders favored lowering the amount of asset purchase to 840B pound. Policymakers warned that inflation could rise above +4% by …

BOE Downgraded Short-Term Growth, but Turned Slightly More Hawkish about TighteningRead More

The Fed turned more hawkish in September, with the first rate hike pushed forward to 2022. Fed Chair Jerome Powell indicated that QE tapering will come “soon”. The staff downgraded the GDP growth forecast for this year, but revised higher that for 2022 and 2023. Inflation projections were revised higher all the way through to …

FOMC Review: Tapering will Start “Soon” while First Rate Hike may Come in as Soon as 2022Read More

Economic developments since the last meeting have raised concerns of “stagflation” in the UK, i.e. slow growth with strong inflation. As the main constraint to growth is supply chain, we do not expect this to derail BOC’s monetary policy stance. We expect the central bank to vote unanimously to leave the Bank rate unchanged at …

BOE Preview – How will New Members Shift the Views of Rate Hike Conditions?Read More

Since the Jackson Hole symposium and the FOMC minutes, the pandemic has worsened in the US, while economic growth appears to be losing steam. These suggest that all monetary policy measures will stay unchanged with asset purchases staying at US$120B per month and the Fed funds rate target at 0-0.25%. We don’t expect any breakthrough …

FOMC Preview: Fed to Affirm Tapering Could Come This Year. Focus Turns to Dot PlotRead More