Central Banks

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The Bank of Canada held its key lending rate at 1.75 percent on Wednesday as expected. The BoC again said escalating trade conflict casts doubt on global outlook but Canada's economy is returning to growth around potential, as expected and inflation is on target.

The Reserve Bank of Australia held interest rates in December at a historic low of  0.75 per cent. RBA said given long lags in monetary policy, decided to hold steady

The Mexican Central Bank, Banco de México cut interest rates as expected. The bank sees lower GDP growth and CPI in 2019 and 2020 in an underperforming economy and widening output gap.

A dovish St. Louis Fed President Bullard speaking in Louisville said the yield curve is in more normal state which could be bullish for the economy in 2020. Risks remain but Fed cuts this year may prompy growth

The Bank of England voted 7 to 2 to maintain Base Rate at 0.75%. The asset purchase target of £435 billion with a corporate bond target £10 billion for bond purchases was voted unaminous. Brexit uncertainty overhangs forecasts.

The Federal Reserve as expected cut rates to 2.00 -.25% after a two day meeting on Wednesday with Jerome Powell as Chairman. Markets had priced in a 97% chance of the Change. Says Labor market remains strong with moderate economy.

ECB left rates unchanged as expected after last month cutting deposit facility interest rates 10 bps to .50% and holding steady rates on the main refinancing operations and on the marginal lending facility unchanged. Sees rates at present or lower levels until near inflation goal

Kansas City Federal Reserve President George joins the 'bleeding obvious camp' mulling she is "mindful that rate cuts could increase financial instability which Fed has limited ability to counteract."

Former Bond King Bill Gross commented Tuesday again on 'fake markets' saying the boost from negative interest rate yields may have reached an end, warning that lower rates won't boost stock markets further when he released his first investment outlook, “The Fixx”, since retiring from Janus Henderson this year.

Fed Chairman Powell in his Denver speech likened now to mid 90s modest rate cuts and says that's the 'spirit' of current cuts. He sees no reason why the expansion can't continue and policy actions are providing support for the outlook.

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