Central Bank Watch

Reserve Bank of Australia Eases Policy Further… Not a Surprise

November 3, 2020

Policymakers at the Reserve Bank of Australia enacted their first Overnight Cash Rate (OCR) cut since March and introduced a program of government bond purchases, which will total A$ 100 billion over the coming six months and likely continue longer. Although the short-term economic outlook is better than at the time of the last full […] More

European Central Bank

October 29, 2020

The ECB Governing Council did not change policy settings, nor was a change expected by street analysts. The deposit rate has been -0.5% since September 2019, and the size of the PEPP program of pandemic support was lifted to 1.35 trillion euros last June and will remain at least through next June. Regular asset purchases […] More

Bank of Japan

October 29, 2020

This month’s Bank of Japan Board meeting coincided with the release of its quarterly Outlook for Economic Activity and Prices. Targeted interest rates of -0.1% on overnight money rates and “around 0%” on the 10-year JGB yield since September 2016 were again not changed, nor did officials elect to modify any other policy settings, according […] More

Bank of Canada Left Overnight Interest Rate Target at 0.25%

October 28, 2020

Three 50-basis point interest rate cuts to an effective floor of 0.25% were implemented by Canadian central bank officials during March, and they continue to affirm that the rate will not be raised until “economic slack is absorbed so that the 2% inflation target is sustainably achieved.” Current projections do not anticipate that happening until […] More

Central Banks of Turkey, Ukraine, and Israel Review Monetary Policies

October 22, 2020

Instead of a follow-through measure after last month’s two percentage point rate hike, officials at the Central Bank of Turkey surprised analysts by keeping their one-week repo rate unchanged at 10.25%. Many had been expected the rate to return to its end-2019 level of 12%. The rate initially this year had been slashed by 75 […] More

Seventh Bank of Mexico Interest Rate Cut of 2020

September 24, 2020

The five-member Bank of Mexico Governing Board decided unanimously to cut its key interest rate to 4.25% from 4.5%. This was the seventh reduction reduction so far this year but only half the the incremental change in the the previous five adjustments but matches the size of the initial cut in February. Although Mexican GDP […] More

Two Percentage Point Interest Rate Hike in Turkey

September 24, 2020

Officials at the Central Bank of Turkey made the biggest splash, hiking the one-week repo rate by two full percentage points to 10.25%, which reverses over half of the 375 basis points of reduction engineered earlier this year between January and May. This directional reversal was ostensibly done in light of this quarter’s “markedly” recovering […] More

Swedish 7-Day Repo Rate Held at 0.00%

September 22, 2020

A statement released by the Swedish Riksbank after officials voted to leave the 7-day repo rate unchanged at zero percent proclaimed, “The Swedish economy has now begun to recover after having fallen sharply in the spring. But the way back is long and fraught with uncertainty. To provide support to economic developments and help inflation […] More

Comments on Fed Chairman Powell’s Press Conference

September 16, 2020

The fact that two dissents were cast against the forward guidance did not get raised in Q&A until late in the press conference and elicited an unconcerned response from the chairman, who observed 1) that the dissents represented opposite sides of the policy spectrum, 2) that all committee members were in favor of a restructured […] More

FOMC Preview

September 16, 2020

This week’s review of Fed policy is not expected change its settings for interest rates or unconventional stimulus such as asset purchases. This was the last scheduled meeting before the November election. To avoid appearing partisan, the central bank avoids, if at all possible, policy changes this close to a presidential election but as in […] More