Central Bank Views
RBA Sticks with Tapering in September, Shrugging Off Short-term Impacts of Lockdown
Surprisingly, the RBA remained optimistic about the economic outlook despite the lockdown in various states over the past weeks. At today’s meeting, the members decided to go ahead with QE tapering from September and upgraded economic forecasts.
The central bank maintained a upbeat view over Australia’s economy. As governor Philip...
RBA Preview – Delaying Taper and Downgrading Near-Term Growth Forecasts
We expect the RBA to postpone the tapering policy announced last month. It will also downgrade GDP growth forecast for this year and revise the unemployment rate higher. All the above changes are driven by the unexpected lockdown in New South Wales, Australia's largest state economy accounting for around...
FOMC Review: Economy Moving Toward Inflation and Employment Goals. FOMC Minutes and Jackson Holes in Focus
The Fed sounded cautiously optimistic at the July meeting. The members acknowledged continued improvements in economic activities and that “the economy has made progress toward" the "maximum employment and price stability goals". While leaving all monetary policy measures unchanged, Chair Jerome Powell affirmed the the ongoing discussions over tapering....
FOMC Preview – Policy Stance to Stay Intact Despite Surging Inflation
With no updates on median dot plots and economic projections, the focus of this week’s FOMC meeting would be the policy statement and the press conference. Since the June meeting, inflation has continued to accelerate. Market optimism was, however, overshadowed by the spread of Delta variant. Policymakers should likely...
ECB Pledges to Continue Front-load QE Purchases until Inflation Reaches 2% Sustainable
The ECB has updated the forward guidance on the policy rate, reflecting the new inflation target concluded in the strategic review. All monetary policy measures stay unchanged as it strives to achieve the symmetric 2% inflation target: The deposit rate stays at -0.5%, the total Pandemic Emergency Purchase Program...
ECB Preview: New Forward Guidance to Reflect New Inflation Target
ECB’s conclusion of the strategy review on July 8 has made this week’s meeting very important. Policymakers adjusted the inflation target to a symmetric 2%, allowing a temporary overshoot. Despite the significant change, no monetary policy is expected to change in July. We only expect some changes in the...
BOC Preview – Hawkish Stance to Maintain with More Tapering
Economic developments since the June meeting suggest that BOC would still maintain an upbeat tone and taper further at this week’s meeting. Policymakers will, however, maintain the forward guidance that the first rate hike would come in 2H22. The staff will also release the latest economic projections. The GDP...
RBNZ Preview – Strong GDP Growth and Inflation Expectations to Anchor RBNZ Optimism
Strong first quarter GDP growth and rapidly rising inflation pressure suggest that the RBNZ would at least maintain a hawkish stance at this week's meeting. While the monetary policy measures will stay unchanged, policymakers will likely react to market expectations of a rate hike in November, compared with RBNZ's...
FOMC Minutes Reveals that QE Tapering to Begin Later this Year
The FOMC minutes for the June meeting confirmed more optimism over the economic outlook. Unwinding of stimulative monetary policy would likely begin earlier than previously anticipated. As the members would begin tapering discussions in coming months, we expect an announcement would be made by end of the year. Meanwhile,...
RBA to Begin QE Tapering in September
As widely anticipated, the RBA announced some changes in the monetary policy. The overall tone of the meeting and the policy statement is upbeat about the economic recovery while cautious over the uncertainty and subdued inflation.
Policymakers remain optimistic over economic developments. As noted in the meeting, “the outlook for...
RBA to Announce Adjustments in QE and YCC Programs
Important decisions will be made at this week’s RBA meeting. All monetary policy measures would remain unchanged. Yet, as indicated in June, policymakers would discuss on the format of QE purchases after completion of the current tranche in September, and the maturity of bonds in yield curve control. While...
BOE Preview: Not Yet Time for Tapering as Virus Resurgence Raises Economic Uncertainty
The BOE would maintain an upbeat tone at this week's meeting. However, the uncertainty, in particular a third wave of the pandemic which has caused a delay in restriction easing, suggests that it would be too early to hint about tapering of monetary policy or pushing forward the first...
Fed Projects 2 Rate Hikes in 2023, Strongly Upgrades Growth and Inflation Outlook
The Fed has turned more hawkish at the June meeting. Besides significant upgrades in the GDP growth and inflation forecasts, the median dot plots now project two rate hikes in 2023, compared with no rate hike until 2024. At the press conference, Fed chair Jerome Powell indicated that the...
RBA Minutes Reveal Members Discussed Three Options to Extend QE
The RBA minutes for the June meeting indicated that the member turned more optimistic about economic recovery. Yet, they remained concerned about soft inflation and wage growth. Accommodative monetary policy would stay in place for the years ahead. at the next meeting, we will likely hear more details about...
FOMC Preview – Too Early to for Tapering while Surge in Inflation is More Imminent
We do not expect the Fed talk about tapering at this week's meeting. Policymakers would likely hint more about it at the Jackson Hole symposium in August while a formal announcement would be made at the September FOMC meeting. Rather, we are more interested in its view on the...
ECB Upgrades GDP Growth and Inflation Forecasts, Refrains from Talking about Taper
The ECB meeting contains little surprise. On economic developments, despite the notion that recent rise in inflation has been driven by temporary factors, the staff upgraded headline inflation projections sharply for this year and 2022. All monetary policy measures stay unchanged. Obviously, policymakers avoided to mention about “taper”, amidst...
BOC Drew Attention to Rise in Core Inflation
BOC remained positive about the economic outlook despite recent softer data. The members viewed that weakness in the job market was temporary. Meanwhile, they were more attentive to the rise in core inflation. We believe the plan of QE tapering remains intact while the central bank is still on...
ECB Preview – Extending Current Pace of PEPP Purchases for 3 More Months
The focus of this week’s ECB meeting is the outlook of PEPP purchases in the second half of the year. Although the Eurozone’s economy has improved, while the vaccination progress has accelerated, since the last meeting, we expect policymakers to maintain the current pace of purchases for another 3...
BOC Preview – Policymakers to Keep Upbeat Tone Despite Softening Growth
We expect the BOC to maintain its relatively hawkish outlook at this week’s meeting. Although economic data released since April have softened slightly, strong oil prices and the positive vaccination progress should allow the members to stay optimistic about the recovery outlook. They would also maintain the monetary policy...
RBA Affirmed that Adjustments to YCC and QE would be Announced in July
As expected, the RBA left all monetary policy measures unchanged in June. Policymakers maintained a dovish tone, suggesting no rate hike at least until 2024. They also affirmed that some adjustments to the monetary policy would be made in July.
On economic developments, while reiterating the "strong" growth outlook in...