Dutch Central Bank Chief First ECB Governor To Raise Prospect of 50Bps Rate Rise

A top European Central Bank official has raised the prospect of a half percentage point rate increase in July. Dutch central bank chief Klaas Knot said if inflation continues to climb then rates may need to be raised. This was the first time such an aggressive shift has been suggested. The ECB left rates unchanged as expected in April. The bank left deposit facility interest rates at -.50%. Highlights Dutch central bank chief Klaas Knot is one of the more … Continue reading “Dutch Central Bank Chief First ECB Governor To Raise Prospect of 50Bps Rate Rise”

Bank of England Raises Interest Rates Fourth Time to 1.00% and Forecast 10% Inflation and Recession Early in 2023

The Bank of England MPC at its May meeting raised the bank rate by 25 bps from 0.75% to 1.00%, as expected. The vote was 6-3 vs 8-1 expected (Haskel, Mann, Saunders voted to raise bank rate 50 bps to 1.25%). The BoE said some further modest tightening may be appropriate in the coming months. The move followed a day after the Federal Reserve raised rates by a half of a percent at their May meeting. Inflation is at the … Continue reading “Bank of England Raises Interest Rates Fourth Time to 1.00% and Forecast 10% Inflation and Recession Early in 2023”

Federal Reserve Raises Rates 50 Basis Points First Time Since 2000 as Expected

The Federal Reserve raised rates by a half of a percent at their May meeting. This was the first time the bank raised rates this much since May 2000 when the Fed was led by Alan Greenspan. The Central Bank raised interest rates by 0.50% (to a target of 6.5%) back then. That was the last time the Fed would ever raise interest rates by that much in one move until day. The rate hike was priced in. The Balance … Continue reading “Federal Reserve Raises Rates 50 Basis Points First Time Since 2000 as Expected”

RBA Raises Rates From Record Low 0.10% by 25 bps to 0.35%

The Reserve Bank of Australia raised interest rates off an all-time low on Tuesday to 0.35% higher than the widely expected 15 bps after the April monthly statement no longer featured the phrase “the board is prepared to be patient”. This indicated the rate cycle has accelerated. This is the first-rate hike by the RBA since 2010. The Australian dollar popped 0.7090 to 0.7140 on the decision, while the ASX 200 dropped on the announcement. RBA patience coming to an … Continue reading “RBA Raises Rates From Record Low 0.10% by 25 bps to 0.35%”

ECB Leaves Rates Unchanged as Expected, Stresses on Flexibility in Making Future Decisions

ECB left rates unchanged as expected in April. The bank left deposit facility interest rates at -.50% and held steady rates on the main refinancing operations and on the marginal lending facility unchanged. ECB reaffirmed commitment to end bond purchases in Q3 this year. Stresses on flexibility when it comes to making any future decisions. ECB Monetary Policy Decision 14 April 2022 Deposit facility rate -0.50% Main refinancing rate 0.00% Marginal lending facility 0.25% Highlights Reaffirms that APP purchases will … Continue reading “ECB Leaves Rates Unchanged as Expected, Stresses on Flexibility in Making Future Decisions”

Bank of Canada Raises Rates 0.50% With Substantial Upward Revision on Inflation

Bank of Canada raised overnights rate by half a percentage point from 0.50% to 1.0%. The last time the BoC raised its benchmark rate by a half percentage point was over two decades ago, in May 2000. The bank also said it would begin reducing the assets on its balance sheet on April 25. The Bank of Canada revised sharply upward its outlook for inflation, while also increasing the growth forecast for 2022. The Bank of Canada raised the overnight … Continue reading “Bank of Canada Raises Rates 0.50% With Substantial Upward Revision on Inflation”

Brainard Warns Fed Prepared to Take Stronger Action on Inflation if Needed

Federal Reserve Governor Lael Brainard pulled the rug out from under the markets on Tuesday when she said, “Inflation is much too high and subject to upside risks and The Fed is prepared to take stronger action if inflation and inflation expectations suggest the need.” Nothing new but remember algorithms have no FOMO emotion while the bond market had a mini taper tantrum. Highlights from Brainard Speech Combined impact of rate hikes and balance sheet reduction will bring policy to a … Continue reading “Brainard Warns Fed Prepared to Take Stronger Action on Inflation if Needed”

RBA Patience Running Out with Inflation, Keeps Rates at Record Low 0.10% Ahead of Election

The Reserve Bank of Australia held interest rates at an all-time low on Tuesday to just 0.1% as widely expected. However, a rate rise may become sooner rather than later, the April monthly statement no longer features the phrase “the board is prepared to be patient”, which many see as an indicator the rate cycle has accelerated. The Australian dollar popped above 76 US cents, while the ASX 200 dropped sharply on the announcement. RBA patience coming to an end … Continue reading “RBA Patience Running Out with Inflation, Keeps Rates at Record Low 0.10% Ahead of Election”

Bank of England Raises Interest Rates Third Time to 0.75% With Inflation the Priority

The Bank of England MPC at its March meeting voted 8-1 Cunliffe dissented in favor of maintaining bank rate at 0.50%) to raise the Bank Rate from 0.50% to 0.75%. The BoE said some further modest tightening may be appropriate in the coming months. The move followed a day after the Federal Reserve Raised Rates for the first time since 2018. Inflation is at the highest rate for a decade, the sharpest annual incline for 10 years and well above … Continue reading “Bank of England Raises Interest Rates Third Time to 0.75% With Inflation the Priority”

Federal Reserve Raises Rates for First Time Since 2018 as Expected by 25 Basis Points

The Federal Reserve raised rates by a quarter of a percent at their March meeting, The QE Taper pace as scheduled ended in March. The rate hike was priced in; however, the surprise is seven 7 hikes in the dot plot. The market has priced that in, but expectations are that generally the Fed lags the market. Last meeting the dot plot showed four hikes in 2022 Federal Reserve FOMC Statement  Federal Reserve Announcement Wednesday 16 March 2022 14:00:00 ET The … Continue reading “Federal Reserve Raises Rates for First Time Since 2018 as Expected by 25 Basis Points”