Analysis

TradingKey - In terms of central banks, none is more powerful than the US Federal Reserve (Fed). That’s down to the impact it has on monetary policy in the world’s largest economy.

(Reuters) - The Federal Reserve risks moving beyond its role as a lender of last resort to a prop markets need to function even in normal times, with pressures likely to increase as U.S. presidential candidates look set to add trillions more to deficits.

Investing.com-- The Bank of Japan is expected to keep interest rates unchanged at the conclusion of a meeting on Thursday, with heightened political uncertainty in the country likely clouding the central bank’s plans to tighten monetary policy. 

TOKYO (Reuters) -The Bank of Japan should avoid overhauling its ultra-loose monetary policy now, the head of a kingmaker opposition party said on Tuesday, a sign the ruling coalition's devastating loss in a weekend election was complicating its rate hike plan.

The New York Fed has started to publish a Reserve Demand Elasticity (RDE) estimate -- measuring the impact, or the elasticity, of the central bank's reserves to changes in rates --  showing the RDE is statistically indistinguishable from zero and points to reserve abundance, JPMorgan said in a note.

(Reuters) - There is no urgency for the European Central Bank to cut interest rates quicker and it could even live with a small, temporary undershoot of its inflation target, Belgian central bank chief Pierre Wunsch said, joining colleagues in pushing back on more dovish views.

By Jamie McGeever ORLANDO, Florida (Reuters) -Last month Federal Reserve Chair Jerome Powell and his colleagues were lauded for starting their policy easing cycle with a half percentage-point rate cut

WASHINGTON (Reuters) - The European Central Bank may need to ease policy somewhat faster than earlier thought but interest rates do not need to fall to a level where the bank is stimulating economic growth, Latvian central bank chief Martins Kazaks said.

ORLANDO, Florida (Reuters) -U.S. and European interest rates have followed parallel paths this year, even as the regions' economic and inflationary outlooks have veered in different directions. Money markets expect this to continue. Economic logic says they're wrong.

(Reuters) -Four Federal Reserve policymakers on Monday expressed support for further interest-rate cuts, but appeared to differ on how fast or far they believe any cuts should go.

"The big risk to the rates outlook we expect comes in Q1, and whether or not we repeat the inflation scare of Q1 2024," economists at UBS said in a note on Friday.

TradingKey – This week, key economic data includes U.S. September durable goods orders, the University of Michigan’s October Consumer Sentiment Index, and preliminary PMI data from several countries, all to be released on Thursday.

Atlanta Federal Reserve Bank President Raphael Bostic said on Friday that he is not in a rush on rate cuts and see the case for rate reduction in the central bank's policy rate to somewhere between 3% and 3.5% by the end of next year, per Reuters.

The People's Bank of China (PBoC) announced on Monday that it cut the one-year Loan Prime Rate (LPR) by 25 basis points (bps) from 3.35% to 3.10% and cut the five-year LPR from 3.85% to 3.60%.

The People's Bank of China (PBoC), National Financial Regulatory Administration (NFRA) and China Securities Regulatory Commission (CSRC) held a meeting on Financial Incremental Policies on Friday. The Chinese officials said they will implement incremental policies following a meeting on October 16. 

TradingKey - Eurozone inflation is steadily falling, with September's rate at 1.8%, down from 2.2% in August, and below the ECB's 2% target for the first time in three years.

(Reuters) - Atlanta Federal Reserve President Raphael Bostic on Tuesday said he penciled in just one more interest rate reduction of 25 basis points this year when he updated his projections for last month's U.S. central bank meeting.

Federal Reserve (Fed) Bank of Atlanta President Raphael Bostic hit newswires during the overnight hours of Tuesday's US market session, noting that the US continues to perform well, and doesn't see strong signs of a potential recession looming over the horizon.

Federal Reserve (Fed) Bank of Minneapolis President Neel Kashkari assuaged markets late Monday, reaffirming the Fed's data-dependent stance and reiterating common Fed policymaker talking points about the health of the US economy, including ongoing easing of inflationary pressures and a still-healthy

The Federal Reserve has been chasing the 2% inflation target for years. Now, with new inflation data from September, it looks like they’re getting close.