Archive

December 19, 2024
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Mexico: 25bp Rate Cut To 10.0% (Consensus 10.0%) in Dec-24

  • Banco de México reduced the overnight interbank rate by 25 basis points to 10.00%, continuing its cautious easing amid declining headline and core inflation trends. Global inflation persistence adds uncertainty.
  • It expects inflation to reach the 3% target by Q3 2026, but risks remain skewed to the upside, driven by potential trade policy shifts, persistent services inflation, and geopolitical disruptions.
  • Future rate decisions will balance the easing cycle with the need for a restrictive stance. They will rely on data to assess the fading of global shocks and domestic inflationary pressures.

December 19, 2024
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Japan: Policy Rate Held At 0.25% (Consensus 0.25%) in Dec-24

  • The BoJ kept its policy rate at 0.25%, aligning with consensus expectations. Domestic recovery and stabilising inflation reduced the need for immediate policy adjustments.
  • It forecasts inflation to stabilise near the 2% target by fiscal 2025, supported by an improving output gap and rising medium-term inflation expectations, despite external risks and commodity price fluctuations.
  • The BoJ’s review of its monetary policy emphasised flexibility in achieving sustainable inflation, with a continued focus on balancing growth-supportive measures against evolving domestic and global risks.

December 19, 2024
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Norway: Rates Held At 4.5% (Consensus 4.5%) in Dec-24

  • The Norges Bank held the policy rate at 4.5%, aligning with the consensus, and signalled potential easing from March 2025, contingent on continued economic moderation.
  • Inflation has slowed significantly but remains above target, constrained by high wage growth and business costs; domestic activity has exceeded expectations, while unemployment remains stable.
  • The outlook is marked by uncertainty, with risks from global trade policy and domestic inflationary pressures influencing the trajectory of future rate adjustments.

December 19, 2024
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Sweden: 25bp Rate Cut to 2.5% (Consensus 2.5%) in Dec-24

  • The Riksbank cut its policy rate by 25bp to 2.5%, meeting consensus expectations and reflecting a total reduction of 1.5 percentage points since May 2024 to support weak economic activity and stabilise inflation near the target.
  • Forward guidance indicates the potential for another rate cut in H1 2025, contingent on stable inflation and growth projections, emphasising evaluating the lagged effects of earlier policy adjustments.
  • External uncertainties, including geopolitical tensions and trade policy ambiguities, alongside domestic risks, such as the krona's exchange rate and fragile recovery momentum, will influence future monetary policy decisions.