Central Bank Watch

A Second Hike of the Reserve Bank of New Zealand’s Official Cash Rate

November 24, 2021

An initial OCR increase of 25 basis points had been done in October, and such has been followed by a second hike of same size to 0.75%. The rate had been previouslyat a record low of 0.25% from mid-March 2020.  A released statement sees continuing reductions in monetary stimulus. Capacity pressures have continued to tighten. […] More

Turkish Central Bank Rate Cut

November 18, 2021

Turkish monetary policy has become very politicized this year, conforming to the wishes of President Erdogan’s view that inflation conforms positively, not inversely, to changes in the central bank interest rates. Erdogan has secured his desired downtrend in Turkey’s one-week repo rate by replacing policymakers at the Central Bank of Turkey who disagreed with him. […] More

South African Interest Rate Hike

November 18, 2021

The South Africa Reserve Bank’s repo rate was increased by 25 basis points to 3.75% from a record low of 3.5% in place since April 2020. The approved decision passed by a narrow 3-2 vote by members of the Monetary Policy Committee. Analysts had been anticipating an initial rate hike this month. CPI inflation has […] More

Icelandic Central Bank Rate Hike

November 17, 2021

The Central Bank of Iceland‘s policy interest rate has also been raised multiple times in response to the recent acceleration of inflation. Today’s hike to 2.0% from 1.5% increased the ante following 25-basis point advances in May, August, and October. “The inflation outlook has deteriorated somewhat since August, owing in part to more persistent global […] More

A Sixth Hungarian Central Bank Rate Hike

November 16, 2021

Magyar Nemzeti Bank’s base rate was raised 30 basis points today to 2.1%. The increase and its size matched expectations. This cycle of gradual increases began in June, hasn’t missed a month, and thus far totals 150 basis points. More tightening is to be expected, as officials served notice that projected inflation in 2022 will […] More

Central Reserve Bank of Peru Lifts Interest Rate by Half a Percentage Point

November 12, 2021

At the Central Reserve Bank of Peru, the Board of Directors felt compelled to react to a 0.6 percentage point further acceleration of CPI inflation to 5.8% in October, its highest level since the start of 2009. Officials attribute the rise mostly to external factors but also mentioned the Peruvian Sol’s recent depreciation. Their hope […] More

Bank of Mexico’s Overnight Interbank Rate Lifted Again

November 12, 2021

Officials at the Bank of Mexico by a vote of four to one authorized a fourth straight 25-basis point hike of the overnight interbank rate to 5.0%. Before the magnitude of global inflationary pressure was understood, the rate last February had been sliced by 25 basis points to 4.0% to culminate 325 basis points of […] More

Large 125-Basis Point Interest Rate Hike at the Czech National Bank

November 4, 2021

There had already been rate hikes of 25 basis points in both June and August followed by 75 basis points in September, but those increases were a mere preamble to a 125-basis point rise in the two-week repo rate to 2.75%. Like many other monetary authorities, those at the Czech National Bank attribute the recent […] More

FOMC Statement and Powell Press Conference

November 3, 2021

The FOMC statement as expected laid out a schedule of tapered new asset purchases that will phase out that activity altogether after next June. Today’s statement indicates another unanimous 11-0 decision but does not address the timing of a subsequent interest rate lift-off. Monthly increases in Fed holdings of Treasury Securities will be reduced by […] More

FOMC Preview

November 3, 2021

Significant financial market movements have transpired in the six weeks since the Federal Open Market Committee last met. The ten-year Treasury yield is a quarter percentage point higher now, and the dollar has appreciated 4.5% against the yen and 1.3% versus the euro. The Dow Jones Industrial Average closed at a record high yesterday and […] More