All articles tagged with #monetary policy
Asia-Pacific shares rose after Wall Street gains driven by Nvidia and Oracle, with Japan’s Nikkei 225 hitting a fresh high on the Takaichi growth narrative; Kospi rose while Hang Seng fell, the Bank of Korea held rates at 2.5%, and Nvidia’s strong data-center revenue boosted tech names and fed the AI rally in U.S. indices.
China's central bank left its benchmark lending rates unchanged for the tenth straight month, keeping the 1-year LPR at 3% and the 5-year LPR at 3.5% while signaling tolerance for a gradually stronger yuan as it seeks to support a slowing economy and shift toward services demand. The yuan has firmed recently, and authorities hope this currency appreciation will coexist with export pressures amid a weak consumer outlook and ongoing real estate weakness.
Former BOJ board member Makoto Sakurai says the central bank could raise rates as soon as March if the yen slides, with a potential 25 basis-point hike and possibly another in 2026–27 to push the policy rate toward 1.75%. He warns faster tightening could strain banks, though inflation remains above target and wage growth could justify action. Economists expect about 1% by end-June, and the next policy meetings are March 18–19 and April 27–28.
Trump’s nomination of Kevin Warsh to lead the Fed could herald a less accommodative, more divided policy stance, potentially shrinking the balance sheet and pushing up long-term yields—risks that may translate into stock-market volatility even as confirmation remains uncertain.
In the Fed's latest meeting minutes, a majority of policymakers signaled they want to see continued progress on inflation before endorsing additional rate cuts, underscoring a cautious, data‑driven path for future easing.
Minutes from January’s Fed meeting show no rush to restart rate cuts, with several policymakers even suggesting rate hikes if inflation remains stubborn, while a larger group favors holding until disinflation makes clear progress; the committee remains divided on the path of policy amid a mixed economic picture.
The Federal Reserve released the minutes of the January 27–28, 2026 FOMC meeting, typically published about three weeks after policy decisions; the document summarizes the economic and financial conditions known to the Committee at the time and is available on the Fed Board’s website.
The Reserve Bank of New Zealand held the Official Cash Rate at 2.25% in February 2026, signaling inflation is likely to return to the 1–3% target in early 2026 amid ongoing recovery, strong commodity prices, resilient regional activity, and cautious household spending, with gradual policy normalization ahead.
Federal Reserve Governor Michael S. Barr argues that generative AI is likely to become a broad, long-run productivity driver, but could cause meaningful short-term labor-market disruptions. Adoption could unfold gradually or rapidly, with sectoral shifts, retraining needs, and potential impacts on wages and inflation. Policy implications include addressing worker transitions and safety nets, while monetary policy remains cautious as AI-driven changes unfold and the economy assesses the pace of adoption and productivity gains.
Kevin Warsh, Trump’s candidate to lead the Fed, advocates a gradual overhaul of the central bank’s asset holdings and balance sheet to coordinate with a Treasury that also seeks lower rates; while designed to reduce borrowing costs and mortgage rates, the plan could raise long-term rates and disrupt markets, requiring careful, incremental steps and broad support on the Fed’s rate‑setting committee, with questions about whether the benefits justify the costs.
The Economist outlines Kevin Warsh, a Trump-era Fed nominee, arguing his stance that inflation is perilous, monetary policy has often been too stimulative, and Fed bond-buying (QE) contributed to economic woes; the piece frames his views as “Warshonomics” and discusses potential policy implications for a Trump-influenced Fed.
Sen. Elizabeth Warren is leading Democrats against Donald Trump’s pick for Fed chair, Kevin Warsh, arguing his past hawkish stance raising the prospect of political influence over policy would undermine the Fed’s independence. With Republicans in the Senate majority, her effort to delay or derail Warsh faces an uphill battle as the nomination moves forward amid broader tensions over inflation, Powell’s leadership, and political pressure on the central bank.
The European Central Bank held all three key rates at 2.00%, 2.15%, and 2.40%, reaffirming a data‑dependent path to bringing inflation to 2% in the medium term. The euro area economy shows resilience, with low unemployment and supportive fiscal spending, but faces global uncertainty. The APP and PEPP will not be reinvested as they mature, and the Council remains ready to adjust policy tools, with the Transmission Protection Instrument available to counter market disruptions.
The ECB left its key rate at 2% for the fifth straight meeting, saying inflation should stabilise toward the 2% target despite uncertain global conditions. Economists stress the move isn’t a non-event, noting that a stronger euro and disinflation pressures could influence policy, with most projections signaling a hold through 2026 and potential hikes only later if growth or inflation dynamics shift.
The Reserve Bank of Australia’s February 2026 Monetary Policy Statement says growth and inflation have been stronger than expected, inflation is broadly based and higher due to capacity constraints, and the inflation outlook has been revised higher, indicating inflation will likely remain above the target for some time. The labour market remains a little tight as demand momentum persists, signaling a cautious policy stance ahead.