Heteronomics Archive

February 27, 2025

ECB Meeting Accounts - January 2025

The ECB emphasised a cautious and data-dependent approach in the account of its January rate cut decision. Market expectations were noted to price in a slower rate-cutting cycle, with the end-2025 rate projected at 2.08%.
While inflation continues to decline, services inflation remains elevated due to persistent wage growth. The ECB expects wage pressures to moderate, but upside risks, including geopolitical uncertainty and trade disruptions, could delay further easing.
Some Governing Council members noted that rates are approaching neutral territory, suggesting limited room for additional cuts. The ECB will assess future moves each meeting, with flexibility to slow or accelerate easing.

February 26, 2025

Contrary to consensus expectations, the Bank of Thailand cut its policy rate by 25bps to 2.00%, citing weaker-than-anticipated growth and rising downside risks.
Structural weaknesses in manufacturing and heightened import competition continue to challenge economic momentum, while inflation remains subdued due to supply-side factors.
Future policy will depend on domestic demand resilience, external trade developments, and financial stability risks, with structural constraints limiting room for further rate cuts.

February 25, 2025

The Bank of Korea cut its base rate by 25bp to 2.75%, aligning with expectations, as downside risks to economic growth intensified amid stabilising inflation and slowing household debt.
Domestic demand remains weak, and US tariff policies constrain export growth. Thus, the 2025 GDP growth forecast was sharply revised downward to 1.5% from 1.9%.
Future rate cuts will depend on balancing inflation risks, exchange rate volatility, and financial stability, with a particular focus on the impact of global trade policies and domestic political uncertainty.

February 19, 2025

The Monetary Policy Committee reduced the OCR by 50 basis points to 3.75%, in line with expectations, citing declining inflationary pressures and significant economic slack, with further cuts likely through 2025.
While near-term inflation may experience volatility due to exchange rate depreciation and higher fuel costs, core inflation and inflation expectations remain well-anchored around the target midpoint.
Global risks, including trade policy uncertainty and geopolitical fragmentation, pose downside risks to growth. Still, the Committee remains confident that maintaining inflation stability will provide flexibility to respond to future shocks.