Archive

October 29, 2025
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BoC Cuts to 2.25%: End or Pause?

  • The Bank of Canada cut its policy rate by 25bp to 2.25%, matching the consensus, and signals the current rate is about right to sustain 2% inflation.
  • Structural damage from tariffs limits further monetary easing. Fiscal policy is expected to carry the economic support burden ahead.
  • Economists are divided: some see the cycle complete at 2.25%, others forecast further cuts to 1.75-2.0% if growth disappoints materially.
October 29, 2025
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Fed Cuts Amid “Data Fog”; Path Ahead Uncertain

  • The Fed’s 25bp rate cut to 3.75–4.00% was anticipated, with the decision reflecting rising labour market risks amid the data fog.
  • Policy outlook hinges on future data. Inflation remains sticky, but the labour market weakening drove today’s pre-emptive move.
  • A pause in QT’s asset runoff demonstrates heightened caution. December’s decision is “not on a preset course”.
October 23, 2025
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Korea Holds at 2.50%: Stability First

  • The BoK held at 2.50%, as expected. Housing is overheating, and Won weakness above 1,400 constrains the scope for near-term cuts despite weak growth.​
  • Four of six board members support further easing. November's decision hinges on trade talks, real estate trends, and exchange rate stability.​
  • Semiconductor exports surge 22% but US tariffs weigh on outlook. The GDP growth forecast is unchanged at 0.9% for 2025, the slowest since 2020.​
October 22, 2025
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Indonesia Pauses Easing on FX Pressures

  • BI held rates at 4.75%, surprising consensus expectations of a 25bp cut. The pause addresses rupiah stability concerns amid USD5.26bn capital outflows.
  • Inflation is benign at 2.65% (core 2.19%) within the target range. Enhanced macroprudential policy is complementing easing with credit growth incentives.
  • Further cuts are likely as the Fed eases, depending on rupiah stability, credit transmission effectiveness, and fiscal-monetary policy coordination.

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