Central Bank Watch

FOMC Preview

June 15, 2022

The early May FOMC meeting issued forward guidance to expect 50-basis point interest rate hikes both today and at the next policy review in late July, and that road map was the accepted wisdom until the last few days when moves of 75 basis points suddenly became the new normal. With hindsight, the FOMC should […] More

Central Bank of Russia

June 10, 2022

The Central Bank of Russia, unlike most other monetary authorities around the world, is marching to a different drum, and the irony is that Russia’s ruthless destruction of Ukraine — a major producer of both energy and food — is a major reason for the rise of world inflation. Two rate hikes by Russian officials […] More

ECB Flags Interest Rate Normalization to Counter Above-Target Inflation

June 10, 2022

Yesterday’s scheduled meeting of the European Central Bank’s Governing Council made news, pre-announcing a likely 25-basis point rise in policy interest rates (currently a zero percent refinancing rate flanked by a negative 0.5% deposit rate and a 0.25% marginal lending facility rate). In addition, a released statement flagged a likely rate hike of more than […] More

Central Reserve Bank of Peru

June 10, 2022

The Central Reserve Bank of Peru also raised its policy interest rate yesterday. The size of the hike, like ones each month since September 2021, was by 50 basis points, and the new rate level of 5.5% compares to 0.25% a year ago. Peruvian CPI inflation last month rose to 8.1%, most since 1998, but […] More

Many Central Banks Raised Their Key Interest Rate During May — Here’s a Tally

May 30, 2022

Accelerating inflation has been a global problem, and a result has been a scramble by central banks around the world to undo stimulus related to the Covid-19 pandemic. In a number of cases, rate now exceed their pre-pandemic levels. This update looks only at central banks whose interest rates were raised this month and compares […] More

Unscheduled Policy Review in Russia Leads to Another Three Percentage Point Interest Rate Cut

May 26, 2022

In an unscheduled policy meeting at the Central Bank of Russia, officials implemented their third 300-basis point interest rate cut since April 8 and “holds open the prospect of key rate reduction at its upcoming meetings.” Economic growth in Russia appears to have slumped very sharply this quarter. The ruble plunged very sharply when Russia’s […] More

South Korea’s Fifth 25-Basis Point Central Bank Interest Rate Hike since August

May 26, 2022

The Bank of Korea’s seven-day bank rate was raised again by 25 basis points. It was the fifth such increase since last August, the third one of 2022, and the second straight monthly meeting in which officials tightened. At 1.75%, the interest rate is back to the level prevailing between July and October of 2019. […] More

FOMC Minutes

May 25, 2022

FOMC minutes from the meeting of May 3-4 confirmed that most members favored raising interest rates by an increment of 50 basis points rather than 25 bps in the next several meetings. No surprise there, as that’s essentially what Chairman Powell conveyed right after the meeting ended. The minutes also reveal a readiness if deemed […] More

New Zealand Interest Rate Hike

May 25, 2022

The Reserve Bank of New Zealand’s official cash rate was raised by the expected amount, 50 basis points to 2.0%, but the released statement ramps up the commitment to restoring price stability. The Committee is resolute in its commitment to ensure consumer price inflation returns to within the 1 to 3 percent target range. Consistent […] More

More Central Bank Rate Hikes in Pakistan, Israel, and Ghana

May 23, 2022

In all of these instances, tightening interest rate cycles inspired by accelerating inflation had begun prior to today’s moves. There have been five increases of the State Bank of Pakistan‘s policy interest rate since September 2021, when the rate was raised 25 basis points from 7.0% to 7.25%. hikes followed of 150 basis points in […] More