Analysis

At the Fed's January monetary policy meeting, policymakers announced that they would keep interest rates unchanged and signaled that there were upside risks to the inflation outlook, meaning they would remain on hold. This decision may put pressure on risky assets such as U.S. stocks.

In line with market expectations and our forecasts, the RBA decided to cut interest rates by 25 basis points, reducing the policy rate from 4.35% to 4.1%. This marks the first rate cut since the end of the tightening cycle from May 2022 to November 2023.

On Tuesday, February 18, the Reserve Bank of Australia (RBA) will announce its interest rate decision for February. The market widely expects the RBA to cut rates by 25 basis points, lowering the policy rate to 4.1%. TradingKey Analyst Jason Tang agrees with this view.

A key measure of excess liquidity in the financial system is evaporating rapidly. Once it disappears, further reduction of the Federal Reserve's balance sheet - 'quantitative tightening' - could trigger a potentially worrying decline in bank reserves.

Central banks around the globe have plenty of room to keep cutting interest rates, and a limited "decoupling" from the U.S. Federal Reserve could continue as it pauses its own policy easing, according to policymakers and analysts.

At its February monetary policy meeting, the Bank of England (BoE) cut interest rates by 25 bps as expected but warned of a strong inflation rebound in 2025 while lowering its economic growth forecasts. Analysts are divided on whether this rate cut signals a hawkish or dovish stance.

As the US Federal Reserve (Fed) gears up for its first Federal Open Market Committee (FOMC) meeting of 2025 on 29 January, investors are closely watching for clues about the trajectory of interest rates. Here’s what you need to know about the key factors shaping this meeting and what to expect.

TradingKey - For influential global central banks, it’s rare to get two big meetings taking place at the same time. But that’s exactly what happened with the US Federal Reserve meeting on Tuesday to Wednesday overlapping with the two-day meeting of the Bank of Japan (BOJ) on Wednesday to Thursday.

TradingKey - Interest rates have been the big topic of discussion in global stock markets over the past 18 months and that’s not going to change any time soon. As usual, the discussion is centred around the US Federal Reserve – the world’s biggest central bank – and its Fed Funds rate

TradingKey - Global stock markets have climbed higher in 2024 and most investors will no doubt be happy with their returns had they stayed invested.

TradingKey - In global stock markets, there are typically three big central banks that influence policy. The first, and most obvious, is the US Federal Reserve and there’s also the European Central Bank (ECB).

TradingKey - Globally, the US stock market and central bank tend to dominate the headlines for investors. But the world is much bigger than the US market. One of the most-traded currencies in the world is actually the Euro and, of course, that is the main currency for the eurozone.

TradingKey - For investors right now, the biggest story – besides president-elect Donald Trump’s incoming administration – is what the US Federal Reserve (Fed) will do with regards to interest rates.

Bank of Japan (BoJ) Governor Kazuo Ueda doesn’t touch upon monetary policy and economic outlook during his scheduled appearance on Thursday.

Federal Reserve (Fed) Chairman Jerome Powell said in prepared remarks delivered at a Dallas event on November 14 that they don't need to be in a hurry to lower interest rates, citing ongoing economic growth, a solid job market and inflation that remains above the 2% target.

In its semi-annual Financial Stability Review published on Wednesday, the European Central Bank (ECB) warned that “economic growth remains fragile.”

SHANGHAI, Nov 19 (Reuters) - China is widely expected to leave its benchmark lending rates unchanged on Wednesday, a Reuters poll showed, as rate cuts a month earlier squeeze banks' profitability and the yuan comes under fresh pressure as Donald Trump returns to the White House.

SINGAPORE, Nov 19 (Reuters) - Investors are betting a slide in the yen will force a hawkish shift at the Bank of Japan and are shorting bonds, buying bank shares and bracing for rates to rise as soon as next month.

Bank of Japan (BoJ) Governor Kazuo Ueda is back on the wires on Monday, noting that “we will check, at each policy meeting, data and factors available at the time in deciding policy.”

The Federal Reserve Chairman Jerome Powell announced on November 14 that strong U.S. economic growth will allow policymakers to decide how fast to lower interest rates. Powell argues that the economy is not sending any signals that the Fed needs to be in any hurry to lower rates.