Henry Occleston
Summary The BoE’s March meeting aligned with our expectation, albeit with less dovish voting. We read little into this. The bar is high for data to prevent quarterly cuts. However, by August, we expect fiscal tightening, labour market loosening and soft core services inflation will push the BoE to accelerate cuts. February inflation will struggle […]
Dominique Dwor-Frecaut
Summary The Fed remained on hold and kept two 2025 cuts in the SEP as I expected. Powell’s growth views were ambiguous as he appeared less pessimistic than the SEP. Powell’s base case is for the tariffs inflation impact to prove transitory, though he stressed uncertainty was unusually high. The FOMC policy consensus grew stronger […]
Viresh Kanabar
Summary Governor Ueda struck a balanced tone at the BoJ press conference, highlighting both growth risks from tariffs and inflation risks from food prices and wages. The BoJ sees a low risk of falling behind the curve on inflation, with the next rate hike likely in June/July, while emphasising short/medium-term rates remain ‘deeply negative’. Wage […]
Antonio Del Favero, Dominique Dwor-Frecaut, Richard Jones
Summary Our base case is no major changes in the dots, economic projections, or during the presser. The first paragraph in the statement could be updated to reflect recent economic developments. We think the longer-run dot will increase marginally from 3.0% to 3.1%. Market Implications We expect some rates selloff and bear flattening, alongside equity […]
Viresh Kanabar
Summary Recent data has been mixed, preventing the BoJ taking a more hawkish tone than January. Food prices and wage growth have been higher than expected but may be negated by rising tariff tensions and weak consumption. We expect Ueda to strike a cautious tone as he waits for more clarity on trade tensions and […]
Henry Occleston
Summary We expect the BoE to leave the bank rate unchanged at 4.5%, with Dhingra, Taylor and Mann voting for another cut. We would be unsurprised if Mann backed another 50bp cut: our BoE LLM sentiment index supports her fear that transmission to financial conditions has weakened. The minutes will indicate whether this view has […]
Dominique Dwor-Frecaut
Summary A surge in policy uncertainty is starting to undermine growth while inflation risks remain tilted to the upside. On the eve of the pre-meeting blackout, with the SPX already down 6%, Fed Chair Jerome Powell indicated a continuation of the Fed’s wait and see stance. Market Implications I still expect no cuts in 2025 […]
Ben Ford
Summary The RBA cautiously lowered the cash rate by 25bps to 4.1% at its February meeting. Three factors drove the easing bias, one held it back. 1) Moderating underlying inflation saw price pressures below RBA forecast. Forward-looking data suggests continued easing, too. 2) Subdued private demand growth has worried the RBA. They have baked in […]
Henry Occleston
Summary The BoE cut 25bp, as expected. MPR forecasts were bearish, and comments still indicate more cuts ahead. I read little into the two 50bp votes. Upward revisions to MPR near-term inflation forecasts exceeded our expectations, with smaller impact from one-offs than we anticipate. Despite labour market loosening, medium-term inflation is below target but still […]
Henry Occleston
Summary We expect the BoE will cut rates by 25bp this week, with an 8:1 vote split. The updated MPR projections will likely be much more bearish on the labour market and GDP, despite strong wage growth. Along with updated supply-side analysis, this should see inflation undershooting target by even more in the medium term […]
Viresh Kanabar
Summary The BoC cut 25bp as expected, while ending QT. The reduction in 2025 GDP growth forecast is not dovish as the BoC reduced its assumption for potential growth. Importantly, the bank’s estimate of the output gap narrowed to -0.75% from -1.25%. This implies there is less economic slack than previously thought. Despite stronger consumer […]
Dominique Dwor-Frecaut
Summary The Fed held rates as expected with its economic assessment and policy outlook unchanged, though a lack of details on the Trump administration’s policies has created unusual uncertainty. Chair Jerome Powell expects the immigration decline to continue and lead to a combination of lower job creation and continued labour market balance. Powell’s presser and […]
4 researchers
Market Pricing The market is pricing a 29% probability of a Fed cut in March and two cuts by 2025. UST Market Technicals A fortnight ago, our US Rates Technical Report (USRTR) showed technicals across the curve were oversold in all the UST futures contracts. Yesterday’s USRTR showed technicals are now a lot cleaner than […]
Viresh Kanabar
Summary We expect the BoC to cut its policy rate by 25 bps tomorrow. Despite a bearish consensus, we don’t see a further reduction in growth forecasts but appreciate the risks to the downside. That’s because we see green shoots in activity, hiring, and investment. Expect Gov Macklem to continue pushing the case for slower […]
Dominique Dwor-Frecaut
Summary The Fed will likely hold rates steady next week as inflation and growth remain stable and high. It will have too little information on the Trump administration’s economic program to assess the impact on policy. Market Implications I still expect no cut in 2025 against markets pricing about 1.5 cuts. Stable and High Inflation […]
Dominique Dwor-Frecaut
Summary The Fed eased as expected but communicated a shallower trajectory for the Federal Funds Rate (FFR) with only two 2025 cuts. Jerome Powell stressed the Fed was entering a new phase: with the FFR close enough to its neutral value, actual disinflation progress would be required for further FFR cuts. Market Implications I still […]
Ben Ford
Summary Having passed the federal government’s long-delayed amendments to the Reserve Bank Act back in November, Treasurer Chalmers has delivered the composition of the two new RBA boards. Two new members will join the Monetary Policy Board: Renée Fry-McKibbin and Marnie Baker. Four current board members will transition to the board. The new MPB will […]
Ben Ford
Summary The SNB cut the policy rate by 50bps, to 0.5%. That was their fourth cut of the cycle, but their first 50bp reduction since January 2015. Underlying inflation pressures are weakening with growth proving modest. The unemployment rate is grinding higher, too. In culmination, it led to a lower inflation forecast in the near-term. […]
Dominique Dwor-Frecaut
Summary The Fed is likely to cut next week despite disinflation stalling as it believes policy is still restrictive and risks to the mandate are balanced. The SEP is likely to show two 2025 cuts next year due to: Recently slower progress on inflation. Risks of higher R*. Uncertainty on the incoming Donald Trump administration. […]
Macro Hive is the community platform for the thinking investor…
Already have an account?…
Spring sale - Prime Membership only £3 for 3 months! Get trade ideas and macro insights now
Your subscription has been successfully canceled.
Discount Applied - Your subscription has now updated with Coupon and from next payment Discount will be applied.