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May 09, 2025
Household Divergence Into the Downturn?
May 9, 2025 10:55 AM UTC
Overall, the shock faced by the U.S. from tariffs is a negative supply shock, which can then be followed by job losses and restrained income and consumption growth. This 2 round can be amplified if a hard landing is seen and quickens job losses, which would really hurt low income households. Howev
UK GDP Preview (May 15): Q1 GDP Jumps But Underlying Picture Nearer Zero
May 9, 2025 9:32 AM UTC
We see the surprise and sizeable February GDP jump consolidating in the March GDP release with a flat m/m reading, this coming after that 0.5% jump (Figure 1). But there are downside risks given the possible (marked) correction back that may occur after what seems to be a very erratic February jum
May 08, 2025
BoE Review: Divided by Scenarios?
May 8, 2025 1:24 PM UTC
The widely expected 25 bp Bank Rate cut (to a 2-year low of 4.25%) came amid a less dovish rather than a more hawkish assessment than was envisaged beforehand. While the new Monetary Policy Report MPR) now sees inflation fall below target almost a year earlier than seen three months ago (Figure 1)
Norges Bank Review: Policy Easing Continues to be Deferred?
May 8, 2025 8:49 AM UTC
It was hardly a surprise that the Norges Bank again kept policy on hold when it gave its latest verdict as was the fact that it failed to be any more explicit about when the rate cut cycle may begin. Instead, while still suggesting rate cuts later this year, it cautions about premature easing. Thi
Sweden – Riksbank Review: Fresh Easing Hints Confirmed?
May 8, 2025 8:03 AM UTC
The very much expected stable policy decision at this Riksbank verdict was the second in succession but where the Board veered away from its previous assertion that that, with the policy rate now at 2.25%, this may be the end of the easing path. Instead, and amid the stronger currency and softer C
Brazil: Reaching the Rate Peak
May 8, 2025 6:43 AM UTC
Forward guidance from the BCB after the 50bps hike to 14.75% suggests that we are close to a rate peak, with inflation concerns now cited on both sides. The disinflationary impact of Trump tariffs on global trade and commodity prices is now being watched, as BCB members have signaled over the last
May 07, 2025
FOMC Likely to Remain Cautious Unless Economy Falls into Recession
May 7, 2025 7:43 PM UTC
Fed’s Powell made clear that with high uncertainty the Fed is in no position to move rates at this point, though how long that will persist is unclear. We see no reason to adjust our existing Fed call of only one easing in 2025, by 25bps in December, and two more in 2026. This would take the Fed F
FOMC leaves rates unchanged, sees increased risk on both sides of mandate
May 7, 2025 6:15 PM UTC
The FOMC has left rates unchanged at 4.25-4.5% as expected. The main change in the statement is to note that the risks of higher unemployment and higher inflation have both risen, which gives little insight on any policy bias though suggests that the Fed could be responsive to data going forward.