Archive

Cutting After Pauses

• The BoE and Fed rarely resume cutting cycles after a pause, yet the Fed seems set to break its hold with a cut just as the BoE and ECB enter their own pauses.
• 2002-03 is the best historical parallel for the Fed, which signals potential cuts should be shallow and are likely to be reversed. Politics is no match for the fundamental need.
• Persistently excessive UK pressures should prevent the BoE from cutting in November or beyond, with a quarterly pause historically unlikely to resolve in another rate cut.

By Philip Rush

BOK Holds at 2.50%, Signals Future Cuts

• The BOK maintains a 2.50% rate as expected, but signals continued easing bias through the first half of 2026, citing below-potential growth requiring support.
• Housing price risks in Seoul override growth concerns despite a modest GDP upgrade to 0.9%, with household debt acceleration complicating policy timing.
• An October rate cut is increasingly likely following the expected Fed move, as inflation is stable near 2% target, providing accommodation scope when financial stability permits.