Watch today’s US Open for insights on the forceful rate hike by the bank of England, Fed Chair Powell’s Congress testimony and more

Wednesday’s increase in core inflation forced the UK central bank to a more forceful 0.5% increase today and although it did not commit to more tightening, backing down looks very hard

UK inflation has come in higher than consensus. Headline CPI printed at 8.7%, higher than the 8.4% anticipated and core CPI was 7.1%, as opposed to the 6.8% expected. Headline inflation should decline over the next few months as base effects kick in. However, core inflation is likely to prove more resilient.

The ECB has lifted its main refinancing rate and deposit rate by 25bps to 4% and 3.5% respectively. This was in line with market expectations. The central bank is in on shaky ground given that the region is in technical recession. However, the ECB is firmly focusing on its fight against inflation. EU core inflation has shown signs of moderation lately (green arrow), but its rate of change (ROC) is…

The Federal Reserve (Fed) halted rate hikes yesterday, after 10 consecutive rate rises over 15 months. In effect, the Fed has chosen to evaluate the impact its rate rises are having. Nevertheless, it indicates that the central bank has made headway in addressing inflation.

The direction of CPI will give the Fed some room to breathe, and a pause is likely this month. A continuation in the trend will further please the Fed and make further hikes this year unlikely, as previous increases finally pass through the transmission mechanism.

Watch today’s US Open for insights on the status quo US inflation report ahead of the Fed’s pivotal policy decision, the strong jobs report from the UK that keeps pressure on the Bank of England for further monetary tightening and more

China CPI and PPI disappointed last week. This week US CPI will be released on Tuesday and the Fed statement is scheduled for Wednesday. The market is pricing in a pause but given the RBA and BoC surprise hikes last week, it is going to be close. Thursday has the ECB expected to hike by 25 bps and Friday will see the BoJ Policy Rate announcement. Tune in to this…

Amidst an uncertain monetary outlook, the US Fed announces a pivotal policy decision. Recent commentary point to a possible hold, while keeping further tightening in play as inflation is far from target and the labor market remains strong

Watch today’s US Open for insights on the Bank of Canada decision to restart rate hikes, Eurozone’s unexpected first quarter contraction and more

There is high uncertainty around the monetary policy outlook, with this week’s surprise decisions by the RBA and the BoC being a testament to that