Monetary Policy
The July Fed minutes showed a broader hawkish bias than the vote suggested, but softer data since the meeting have reduced the urgency to hike. The FOMC held rates at 3.5%-3.75% despite three dissents in favor of a 25 bps hike. The minutes revealed support…
Bank Indonesia held rates at 5.75%, reinforcing our EM strategists’ view that earlier hikes were temporary measures to support the rupiah rather than a shift away from growth-first policy. Inflationary fiscal policy remains a concern as the government…
The RBA's tightening cycle is likely over, despite Governor Bullock's hawkish tone. The cash rate was left unchanged at 4.35% for a second consecutive meeting, in line with consensus, after three hikes earlier this year. The decision was unanimous. Updated…
July's upside surprise in Swedish core inflation should not derail an on-hold Riksbank. Headline CPIF eased to 0.7% y/y (-0.3% m/m), broadly in line with estimates. CPIF excluding energy accelerated to 0.6% y/y (0.4% m/m), above both economists’ estimates and…
Brazil’s central bank cut rates for a fourth consecutive meeting, but inflation risks persist. The move followed a softer-than-expected inflation print, and policymakers signaled that more cuts are likely. Our EM strategists have argued that both policymakers…
The BoJ signaled further hikes, but not the more aggressive tightening needed to stabilize the JPY. The Bank of Japan held rates at 1% as expected in an 8-1 decision, with board member Takata dissenting in favor of a 25 bps hike. The BoJ acknowledged more…
A sidelined BoE confronted with weak growth and easing price pressures supports an overweight in UK gilts and an underweight in GBP. The BoE held rates at 3.75% for the fifth consecutive meeting. The 6-3 decision saw Mann, Greene, and Pill dissent in favor of…
Section I outlines BCA’s views on the US-Iran conflict, Europe’s near-term outlook, the currency and bond selloffs in Japan and the early days of the Warsh Fed. In Section II, Roukaya, Matt, and Artem argue that the worst of gold's downturn is likely behind us. Real rates and the dollar — which have reasserted themselves as gold's primary drivers — are set to shift from headwinds to tailwinds for the metal.
Despite today’s hold, the bar for a rate hike in September remains low and contingent on the next two core CPI reports.
The Fed held rates at 3.5%-3.75%; despite market jitters, cooling data should keep policy on hold unless labor and inflation reaccelerate. The decision drew three dissents from regional presidents Hammack, Kashkari, and Logan in favor of a 25 bps hike. The…