Heteronomics Archive

March 21, 2025

Chile: Policy Rate Held At 5.0% (Consensus 5.0%) in Mar-25

The Central Bank of Chile held the policy rate at 5%, as expected, reflecting caution due to persistent inflation risks despite stronger-than-forecasted economic activity and improved financial conditions.
External uncertainty has intensified, with geopolitical tensions and US trade protectionism contributing to divergent market reactions and a global dollar weakening, supporting Chile’s terms of trade.
Domestic inflation remains elevated, and expectations are not yet fully anchored, prompting the Board to maintain a data-dependent stance focused on securing inflation convergence to its 3% target over two years.

March 20, 2025

The SNB lowered its policy rate by 25bps to 0.25%, in line with expectations, citing low inflation and downside risks to price stability. Inflation is projected to remain within the central bank’s target range, reducing the need for aggressive monetary easing.
Switzerland’s economy remains resilient, with solid Q4 2024 growth, but global uncertainties—including geopolitical tensions and trade risks—could pose challenges. Domestic demand is expected to benefit from rising real wages, while weak foreign trade may dampen overall growth.
Future policy decisions will be data-dependent, with the SNB closely monitoring inflation and external conditions. While further easing is possible, ongoing global inflationary pressures and fiscal stimulus in Europe could influence the central bank’s stance.

March 20, 2025

As expected, the Riksbank kept its policy rate unchanged at 2.25%, citing broadly stable inflation and economic conditions despite recent global volatility.
Inflation has exceeded expectations due to temporary factors, but it is projected to stabilise close to 2% next year as these effects normalise and the krona strengthens.
Geopolitical tensions, trade policy shifts, and domestic economic factors such as household consumption and investment will be key in determining future monetary policy adjustments.

March 19, 2025

The Federal Reserve held the federal funds rate at 4.25%-4.50%, consistent with expectations, citing increased economic uncertainty and persistent inflation risks.
Core PCE inflation was revised up to 2.8% for 2025, signalling ongoing inflationary pressures, while GDP growth was downgraded to 1.7%, indicating stagflationary economic forces.
The Fed will slow balance sheet reduction from April, reflecting concerns over liquidity and financial conditions, while future rate decisions remain data-dependent.