Central Bank Watch
Bank of Japan Preview
March 16, 2010
Japan’s Democratic Party government wants the Bank of Japan to take more forceful action to resist deflation. Core and headline consumer prices each fell 1.3% in the year to January. Nominal GDP was 8.0% lower last quarter than two years earlier, and the GDP price deflator contracted 2.8% between 4Q08 and 4Q09. Bank loans are [...] More
Vital Market Signs When the FOMC Met Previously
March 16, 2010
Monetary policymakers at the Federal Reserve have a dual mandate to promote stable, low inflation and to maximize employment. As a result, the Fed pays more attention than most central banks to the unemployment rate. The FOMC is not expected to modify the belief of officials that present economic conditions including a soft labor market [...] More
FOMC’s Six-Month Rule: Some Background
March 15, 2010
The Federal Open Market Committee will release a new policy statement at around 18:15 GMT on Tuesday. Analysts are not expecting significant changes, and the state of finance reform legislation in the senate, which would affect the Fed in profound ways, has diverted the press attention this week from the policy meeting. That this is [...] More
Central Reserve Bank of Peru Drops Hint of Coming Rate Increase
March 12, 2010
Peru’s central bank reference interest rate was left by officials at 1.25% after this week’s policy meeting. It has been at that level since a 75-basis point reduction last August. That had been the seventh consecutive monthly easing from a peak of 6.5% in the beginning of last year. Other reduction amounts were 25 bps [...] More
Filipino Central Bank To Phase Out Liquidity-Enhancing Measures But Leaves Key Overnight Borrowing Rate at 4.0%
March 11, 2010
Bangko Sentral Ng Pilipines will reduce the peso rediscounting budget from P60 billion to P40 billion but has left its key borrowing and lending rates steady at 4.0% and 6.0%, their respective levels after cuts totaling 200 basis points and administered between December 2008 and July 2009. After the final cut last July, officials announced [...] More
Bank of Korea Policy Unchanged
March 11, 2010
South Korea’s Monetary Policy Committee kept its key interest rate at 2.0% as expected. Cuts totaling 100 basis points in August 2008, 175 bps in December 2008 and 50 bps in February 2009 slashed the rate from 5.25% to 2.0%, where it has been ever since. A statement on the Bank of Korea website retains the [...] More
September Timing of a First Swiss Rate Hike Much More Probable Than June
March 11, 2010
The Swiss National Bank retained a 0.25% target on three-month Libor within a 0.0-0.75% corridor. Last September, officials served notice that the present expansionary stance cannot be maintained for the entire forecast horizon without compromising medium- and long-term price stability, and quantitative easing was ended last December. Today’s new quarterly SNB Monetary Policy Assessment does [...] More
Reserve Bank of New Zealand Meeting Review: No surprises
March 10, 2010
The Official Cash Rate of New Zealand was left at 2.5%, where it has been since April 2009. After New Zealand entered a five-quarter recession in the first quarter of 2008, 575 basis points of rate cuts were implemented between July 2008 and April 2009. As they did after the prior two meetings and as [...] More
Hawkish Statement From the Bank of Thailand
March 10, 2010
The Bank of Thailand left its benchmark interest rate at 1.25%, the level since a 25-basis point cut last April 8. Prior cuts of 100 bps, 75 bps, and 50 bps had been implemented in December 2008, January 2009 and February 2009. A considerably more hawkish statement from monetary authorities today sets the stage for [...] More
Swiss Monetary Policy Preview
March 9, 2010
The Swiss National Bank holds fewer interest rate policy meetings than most central banks, just one per quarter when it also issues a fresh assessment with a projected inflation path going out 11 quarters. The March review will be unveiled on Thursday. The last rate cut occurred a year ago, when the Libor target corridor [...] More
