Central Bank Watch
Central Bank of Brazil
April 29, 2015
As expected, the policymaking committee unanimously agreed to another hike of the Selic interest rate, this time to 13.25% from 12.75%. It has cumulatively been increased by 150 basis points in 2015, 550 bps since April 2013, and 600 bps since the current tightening cycle began in the spring of 2013. Brazil’s inflation rate, now […] More
Central Bank Watch
Reserve Bank of New Zealand Keeps Official Cash Rate at 3.5%
April 29, 2015
The OCR has been at 3.5% since a 25-basis point hike last July, but the policy bias is toward easing as attested by this passage from the latest policy statement: The Bank expects to keep monetary policy stimulatory, and is not currently considering any increase in interest rates. We are watching closely the ongoing impact […] More
Central Bank Watch
FOMC Statement
April 29, 2015
Today’s statement does not constrain monetary officials at the Federal Reserve from doing whatever they believe is most appropriate at subsequent meeings on June 17, July 29 and September 17. The opening paragraph, always devoted to a rundown of economic conditions since the last policy meeting includes a number of downgrades, acknowledging the slower pace […] More
Deeper Analysis
Remarks on the Weak 1Q U.S. GDP Data
April 29, 2015
Real GDP expanded just 0.2% last quarter, and nominal GDP edged up by a smaller 0.1% at an annualized rate. Both results were below consensus. Weak first quarters have become an habitual occurrence, which makes sense unless you happen to still believe that talk of climate change is a myth. Seven of the last nine […] More
Central Bank Watch
FOMC Preview
April 29, 2015
The biggest market changes since the last FOMC meeting (see table below) are a euro recovery against the dollar and a 34% jump in oil prices. U.S. economic data have been weaker than projected, depressed by dollar appreciation and another disruptive winter. U.S. real GDP climbed just 1.2% at an annualized rate over the past […] More
Central Bank Watch
Swedish Riksbank Expands Quantitative Easing
April 29, 2015
A SEK 10 billion program of bond buying was introduced by Swedish monetary authorities in February, expanded by an additional 30 billion kronor in March, and now again raised by another SEK 40-50 billion, bringing the total size of the initiative to SEK 80-90 billion. At this month’s meeting, moreover, the repo rate, which had […] More
Central Bank Watch
A Still-Divided Bank of Thailand Policy Committee Cuts its Interest Rate Again
April 29, 2015
A 25-basis point cut in March had been Thailand’s first interest rate change in a year. The vote, however, had been 4-3 to approve that drop, so analysts were not expecting a follow-up stimulus this soon. This time, a 5-2 majority approved cutting the interest rate to 1.5%, lowest since June 2010, from 1.75%, and […] More
New Overnight Developments Abroad - Daily Update
FOMC Day
April 29, 2015
Two central banks eased monetary policy earlier today. The Swedish Riksbank expanded quantitative stimulus, kept a negative 0.25% repo rate, indicated that such could go lower, and warned that a variety of other measures may be taken to ensure that inflation recovers to target. The repo rate is projected to be no higher than 0.8% […] More
