Jump to content

Central banks preview: Fed, ECB, BoJ rate decisions

Recommended Posts

Investors are braced for a big week packed with central bank meetings by the Fed, ECB, and Bank of Japan. IGTV’s Angeline Ong takes a look at why inflation and the labour market are the keys to what these central banks do next.

 Angeline Ong | Presenter, Analyst and Content Editor, London | Publication date: Monday 12 June 2023 

(Video Transcript)

Central banks on rates

Now it's a huge week for interest rates, especially since we've seen a repositioning of interest rate hike bets.

Three central banks are set to adjust or not adjust their policy. The Federal Reserve (Fed) rate decision is on Wednesday and markets are pricing in a pause for the Fed after 10 straight meetings in which it has jacked up its key rate by a full five percentage points in 14 months.

Economists do see this coming meeting as an opportunity to pause so that the Fed can see the degree of a slowdown it's managed with its rate action so far. Markets are beginning to price in a further potential 25 basis point hike at the end of July.


Then the action doesn't stop there. On Thursday, the European Central Bank (ECB) is expected to raise its key interest rate by 25 basis points, and again in July before pausing for the rest of the year.

Now this is according to a poll conducted by Reuters, which indicated that economists believe inflation across the single currency economies remains sticky. Now after 375 basis points of hikes over the past year, economic activity across the region has slowed sending the eurozone into a technical recession.


As for the Bank of Japan (BoJ) on Friday, it is forecast to maintain its ultra loose policy, but it could also signal that inflation is overshooting its forecast. The so-called Core CPI reading, excluding food and energy, which is favoured by the BoJ, has jumped to 4.1% year-on-year in April. This is a level not seen since the early eighties and would be an appetiser ahead of the bank's economic projections due in July.

In BoJ governor Kazuo Ueda's opinion though, inflation overshooting the Bank of Japan's target doesn't mean a rate hike necessarily. The governor already said he needed to see durable wage growth accompany price rises before considering any move.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 22/09/23 03:49
  • Posts

    • Hi @Sureforex Thanks for sharing a great post.   All the best - MongiIG
    • Additionally, you can explore SMM services, which offer the cheapest instagram comments and followers. This can expand your audience and drive traffic to your website through your Instagram page. By diversifying your approach, you can strengthen your online presence and attract more users to your site. 
    • Some indices in Asia saw a modest rebound, but the ASX200 and Nikkei continued to fall, following on from yet more heavy losses in the US. Stocks continue to take a battering from the realisation that the Fed would leave US rates at their current levels for a longer period than previously thought, leading to a reversal in equities and a resumption of the losses seen in the early part of September. Today's data is dominated by flash PMIs from around the globe, in the wake of a Bank of Japan statement that left policy unchanged and maintained its dovish outlook. While US futures have recovered slightly, European markets seem set for a choppy open.  
  • Create New...