Archive

November 05, 2025
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Brazil's Cautious Monetary Pause

  • Brazil's Copom holds Selic at 15% as expected, but signals a very prolonged pause ahead with rates to stay elevated while inflation expectations remain deanchored above target.
  • The committee emphasises that a contractionary policy is needed despite moderate growth, citing tariff risks, currency depreciation pass-through, and resilient labour market pressures.
  • Rate hikes remain optionally available if inflation expectations fail to re-anchor, but markets now price March 2026 easing, contingent on fiscal discipline and external stability.
November 04, 2025
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RBA: Cautious Hold in Uncertain Times

  • The RBA held its cash rate at 3.6% as anticipated, but its decision marks a shift from easing after September's inflation surprise, signalling an extended pause in rate cuts through at least mid-2026.​
  • Central forecasts now project trimmed mean inflation above 3% for the coming quarters before settling at 2.6% in 2027, requiring mildly restrictive policy rates of 3.4% by mid-2026—materially slower easing than many forecasters anticipated.​
  • Labour market softening provides limited comfort as elevated vacancies and wage pressures persist. Two-sided uncertainty around demand strength and the global outlook creates risks justifying a cautious approach to future cuts.
October 30, 2025
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BOJ Holds: Caution Amid Uncertainty

  • The BOJ held rates at 0.5% as expected, with a 7-2 vote showing continued division. A December hike is now priced at 50-55%, down from 68% pre-Takaichi.
  • Inflation forecasts are unchanged at 2.7% (FY25), 1.8% (FY26), with sluggish underlying price growth and downside economic risks delaying tightening.
  • Wage sustainability and trade policy uncertainty dominate the outlook. 2026 labour talks and corporate profit trends will determine the rate path timing.
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”.

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