Archive

December 10, 2025
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Brazil’s High-Rate Path

  • Brazil's Copom unsurprisingly held the Selic at 15%, signalling a prolonged, highly contractionary stance to force inflation back toward the target.
  • Deanchored inflation expectations and resilient services inflation mean cuts are unlikely before clear disinflation and weaker labour data emerge.
  • Fiscal doubts, BRL weakness and US policy risks raise upside inflation pressures, keeping the door open to renewed hikes and delaying the start of an easing cycle.
December 10, 2025
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BoC: Structural Pause at 2.25%

  • The BoC held the policy rate at 2.25%, matching the consensus, and framed this as a pause near neutral that likely extends the horizon for stable rates.​
  • Strong but trade‑driven Q3 growth and still‑soft domestic demand argue against near‑term hikes, keeping the bias toward a prolonged hold rather than renewed easing.​
  • With CPI near 2% and core around 2.5%, the Bank sees inflation anchored, reducing pressure for further cuts and reinforcing a data‑dependent, higher‑for‑longer rate stance.​
December 09, 2025
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Inflation Resurgence Tests RBA Patience

  • The RBA held rates at 3.60% despite inflation surprising at 3.8% and signs of broader price pressures, reflecting uncertainty about data persistence and mixed demand signals.
  • Recent wage and unit labour cost strength alongside tight labour market conditions have shifted the rate outlook from cuts to potential hikes within twelve months if pressures persist.
  • The Board signals a willingness to tighten if inflation or demand accelerates, but emphasises data dependency (inflation and labour markets) through February 2026.
December 05, 2025
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India: Goldilocks Gives Way to Constraints

  • RBI cuts repo rate by 25bps to 5.25% as expected, citing exceptional disinflation (0.25% October CPI) and 8.2% growth, though maintaining a neutral stance signals easing cycle may be nearing end.
  • It forecasts headline inflation to fall to 0.6% in Q3 before rebounding sharply to 2.9% and 3.9% subsequently, limiting the scope for additional rate cuts despite growth moderating from current highs.
  • Durable liquidity injections alongside rate cuts acknowledge monetary transmission constraints. The consensus sees 5.25% as the terminal rate, with policy dependent on inflation normalisation and external sector stability.

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