Heteronomics Archive

June 18, 2025

US: Policy Rate Held At 4.5% (Consensus 4.5%) in Jun-25

The FOMC maintained the federal funds rate at 4.25% to 4.5%, in line with expectations, citing resilient economic activity and a still-elevated inflation profile.
Revised projections indicate slower GDP growth and a higher inflation path for 2025, with upside risks to inflation dominating the policy outlook and contributing to a more cautious approach to rate normalisation.
Future interest rate decisions will hinge on the persistence of inflationary pressures—particularly from tariffs—and the anchoring of inflation expectations, with the Committee retaining a flexible, data-dependent stance.

June 17, 2025

The Bank of Japan unanimously held its policy rate at 0.5%, in line with consensus forecasts, reflecting a cautious stance amid moderate economic recovery and subdued underlying inflation.
The Board announced a gradual reduction in JGB purchases, with a detailed schedule through March 2027, while retaining flexibility to respond to market volatility and planning an interim review in June 2026.
The outlook for future interest rate increases remains contingent on sustained improvements in underlying inflation and wage growth, with significant attention to global economic risks and domestic demand conditions.

June 17, 2025

The Central Bank of Chile unanimously held the policy rate at 5% in June 2025, in line with consensus expectations, citing persistent global uncertainties and a favourable domestic inflation trend.
Inflation has moderated more than anticipated, with headline and core CPI easing and medium-term expectations anchored at 3%, yet inflation remains above the target range for a seventeenth consecutive month.
The outlook for future rate decisions will hinge on the evolution of external risks—primarily geopolitical and trade tensions—and the pace of inflation convergence, with the Board signalling a gradual move towards neutral rates if baseline projections hold.

June 04, 2025

The Bank of Canada held its policy rate at 2.75%, as expected, but disappointed market participants who anticipated a dovish signal or rate cut, reflecting a cautious, data-dependent stance.
Firmer-than-expected core inflation and persistent tariff-related cost pressures have offset the disinflationary effects of a softening domestic economy, prompting the Bank to be vague and non-committal about the potential for further rate cuts.
The interest rate outlook remains highly uncertain, with future policy decisions hinging on the evolution of inflation, domestic demand, and the unpredictable trajectory of US trade policy.