Heteronomics Archive

July 08, 2025

Australia: Policy Rate Held At 3.85% (Consensus 3.6%) in Jul-25

The RBA surprised markets by maintaining the cash rate at 3.85%, rejecting consensus expectations for a cut and citing the need for further confirmation that inflation is sustainably on track to the 2.5% midpoint.
The decision reflects persistent uncertainty in the global economic environment and a domestic outlook characterised by robust labour market conditions but only gradual recovery in household demand, with risks on both sides of the inflation outlook.
The Board’s split vote and explicit data-dependent stance signal that future interest rate decisions will be highly sensitive to forthcoming inflation and labour market data, as well as evolving international developments.

June 26, 2025

Banxico cut rates by 50 basis points to 8.00% as expected, but Deputy Governor Jonathan Heath's dissent signals growing concern about aggressive easing while inflation remains at 4.51%.
The central bank raised year-end inflation forecasts to 3.7% from 3.3% while maintaining that convergence to the 3% target will occur by Q3 2026.
Removal of language about future cuts of "similar magnitudes" suggests a shift towards more cautious easing amid trade policy uncertainty and persistent inflation pressures.

June 25, 2025

The Bank of Thailand maintained its policy rate at 1.75% by a 6-1 vote, in line with expectations, citing robust first-half growth but heightened risks from US trade policy and global uncertainties.
Despite raising its 2025 growth forecast to 2.3%, the MPC flagged a likely economic slowdown in the second half of the year, subdued inflation well below target, and negative credit growth as key factors influencing future rate decisions.
The Committee signalled a data-dependent approach, preserving limited policy space and indicating that further rate cuts would require a significant deterioration in growth or inflation outlook.

June 19, 2025

The SNB lowered its policy rate to 0% as expected, responding to declining inflation and subdued price pressures, with the latest forecasts indicating inflation will remain well within the price stability range through 2027.
The SNB’s guidance remains cautious, highlighting global trade tensions, external risks, and persistent uncertainties as key factors shaping the interest rate outlook.
Future policy decisions will be data-driven, with the SNB prepared to adjust rates further or intervene in currency markets if inflation deviates from target or if external shocks intensify.