Federal Reserve Chair Jerome Powell announced that interest rates will remain unchanged during a June 12, 2024, news conference. This ahead of a busy week where several major central banks are set to decide on monetary policies. Investors anticipate the Federal Reserve’s highly-awaited two-day meeting starting Tuesday, where the bank is expected to initiate a rate-cutting cycle. The expected outcome is a quarter-point cut, though 41% of traders foresee a potential half-point reduction.
Globally, Brazil’s central bank will meet from Tuesday to Wednesday, followed by the Bank of England, Norway’s Norges Bank, and South Africa’s Reserve Bank on Thursday. The Bank of Japan will cap the week with its decision on Friday.
John Bilton of J.P. Morgan Asset Management indicated that a prolonged rate-cutting phase has begun globally. He suggested that the Federal Reserve might cut rates by 25 basis points this week, with the Bank of England poised to make a similar move following economic stagnation.
Within the Fed, policymakers have been gearing up for rate cuts, currently targeting 5.25% to 5.5%. Some economists advocate for a 50 basis point cut in September, arguing previous rate hikes were aggressive. Debate continues with some proposing a more conservative 25 basis point reduction.
In Brazil, stronger-than-expected Q2 economic data suggests a potential rate hike by the central bank next week, likely raising the Selic rate to 10.75%. The Bank of England is unlikely to cut its rates this week but may do so in November. South Africa’s Reserve Bank is also expected to cut rates, marking the first such move since the pandemic.
The Norges Bank will likely maintain its 4.5% rate, and the Bank of Japan is not expected to raise rates imminently but could by year’s end.
Original Story https://www.cnbc.com/2024/09/16/fed-boe-and-boj-its-a-big-week-for-central-bank-rate-decisions.html
Category :
Tags:
