Week in review
- U.S Federal Reserve holds rates, but signals three cuts this year
- Bank of England holds rates steady
- Bank of Japan raises the cash rate for first time in 17 years to 0.0-0.10%
Week ahead
- U.S. PCE deflator
- Tokyo CPI
- Eurozone economic confidence indicator
Thought of the week
Last week was a big one in the land of central banks. In Asia, central banks leaned towards a hawkish tone. The Bank of Japan raised its policy rate for the first time in 17 years and abandoned its yield curve control policy, while the central bank of Taiwan (CBC) raised rates by 12.5 basis points to 2% - its highest point since 2008 – in an effort to curb future inflationary pressures from the likely 10% electricity tariff rise in April. Meanwhile, the Reserve Bank of Australia (RBA) held the neutral line towards policy and would not be drawn on forward guidance preferring to assess incoming data. The February employment report reinforced the wait and see approach of the RBA. In the U.S., Fed still expects to cut rates three times this year, but anticipates fewer cuts in 2025. In Europe, the Bank of England (BoE) left rates unchanged at 5.25%, with the main surprise coming from the vote, which indicated the BoE has become less hawkish. On the other hand, the Swiss National Bank surprised markets as the first developed market central bank to ease with a 25 basis points cut, sending the Swiss franc to an eight-month low against the euro.
Market expectations* for central bank policy rates
Market data