Weekly Focus

After a long period of unusually low interest rates, some may have been concerned that when central banks hike interest rates rapidly, eventually something could break. Events unfolding in the past seven days have served as a sharp reminder that there may be a trade-off between central banks’ fight against inflation and financial stability. Referring […]

Week Ahead – Fed Decision to Fuel Volatility in Nervous Market

With cracks appearing in the US banking system, markets think there’s a chance the Fed won’t raise rates next week. But considering that the Fed has already taken measures to ease financial stress and that inflation is still raging, the most likely outcome is a rate increase accompanied by high rate projections, which could boost […]

March Flashlight for the FOMC Blackout Period: The Flashlight Needs Fresh Batteries

Summary The FOMC downshifted its pace of policy tightening, lifting the fed funds rate by 25 bps to a range of 4.50-4.75%, at the conclusion of its last meeting on February 1. Since then, the ground under the Fed has shifted enormously. The economic data have been decisively strong since the FOMC last met. Nonfarm […]

Bank of England Preview

We expect the Bank of England (BoE) to hike the Bank Rate by 25bp. We expect this to mark the peak in the Bank Rate of 4.25% as the BoE is set to signal a pause in the hiking cycle. EUR/GBP is set to move lower upon announcement – yet we highlight that changes to […]

Fed Preview

With market sentiment stabilizing, underlying inflation still elevated & systemic crisis risks now seemingly contained, we think Fed will continue hiking next week. Even if a broader crisis is averted, the tightening credit standards in regional US banks could weigh on economic growth, and inflation expectations. We still expect a 25bp hike next week and […]

Fed to Go Ahead with 25 bp Hike; Canadian CPI Growth to Slow

The Federal Reserve’s March interest rate decision comes amid significant market turmoil that has raised the prospect of a pause on its tightening cycle. On one hand, there are good arguments for the Fed opting to take a wait-and-see approach amid (by some measures) the worst bond market volatility since the global financial crisis. Recent […]

Week Ahead – More Turmoil to Come?

US A week ago, a lot of economists were thinking the Fed was going to pick up the pace of rate hikes as disinflation trends were struggling given a robust core services inflation reading and tight labor market conditions.  A banking crisis however is changing how policymakers are assessing the impact of the first eight […]

Weekly Economic & Financial Commentary: FOMC

Summary United States: Top O’ the Cycle? In February, the headline and core CPI rose 0.4% and 0.5%, respectively. The headline PPI fell 0.1%. Retail sales declined 0.4% during February, while industrial production was flat (0.0%). Housing starts and permits jumped 9.8% and 13.8%, respectively. The Leading Economic Index dipped 0.3%. The preliminary University of […]

The Weekly Bottom Line: Some Banks Fail, But It's Not a Free Fall

U.S. Highlights Following the collapse of SVB and Signature Bank, policymakers were quick to put together a rescue package over the weekend to allay depositor fears and reassure financial markets. Despite recent market jitters, economic data out this week including CPI, retail sales, and housing starts all suggest more tightening is still required to cool […]

Forex and Cryptocurrency Forecast

EUR/USD: ECB Not Fazed by Banking Crisis The past week was marked by a large black candle when EUR/USD plummeted from 1.0759 to 1.0515. And this happened not on Thursday, March 16, when the ECB made a decision on the interest rate, but the day before. The reason for the weakening of the European currency […]