Middle East Stasis Set to Keep Fed on Hold at Chair Powell’s Swan Song
Federal Reserve Chair Jerome Powell’s term ends on May 15, but he has signaled he may remain chair pro tempore amid political friction with the White House. The April FOMC meeting is expected to hold rates steady, with Fed funds futures pricing no change and only modest cuts – about 10 basis points – by year‑end. Persistent Middle‑East tensions are keeping core inflation above 4%, limiting the Fed’s ability to move aggressively, while the central bank’s balance sheet has expanded by roughly $185 bn in securities and T‑bill purchases have been trimmed to $25 bn a month. Analysts still forecast two 25‑bp cuts this year, likely in September and December, as the Fed balances inflation containment with a stalled labor market.
National Bank of Hungary Preview: The Chance of a Cut This Year Has Vanished
The National Bank of Hungary (NBH) is expected to leave its policy rate at 6.25% through the end of 2026, as geopolitical uncertainty and post‑election fiscal questions limit flexibility. A recent removal of forward‑guidance language signals a more hawkish stance,...
Kazakhstan Holds Rates, Indicates Room for Cuts
Kazakhstan’s National Bank left its benchmark rate unchanged at 18.00% on April 24, reaffirming a conditional easing stance for the second half of 2026. The central bank highlighted a slowdown in CPI to 11.0% YoY and a dip in 1Q...
Czech Consumers Are Worried About the Outlook
Czech consumer confidence slipped 4.4 points to 106.0 in April, while business confidence held steady at 100.4, leaving the composite index at 101.3. The drop reflects heightened worries about the Middle‑East conflict, soaring energy costs and a weakening labour market,...
Bank of England Likely to Keep Rates on Hold as Markets Ramp up Hike Bets
The Bank of England is expected to keep its policy rate at 3.75% during the April meeting, despite markets pricing in two hikes by year‑end. Governor Andrew Bailey warned investors they were “getting ahead of themselves,” and the BoE appears...
German Economy Back in Crisis Mode as Ifo Index Drops to Pandemic Levels
Germany’s Ifo business‑climate index slipped to 84.4 in April, its lowest reading since the COVID‑19 pandemic, as firms grapple with the fallout from the Middle East war, soaring energy prices and emerging supply‑chain frictions. Energy‑intensive industries, which account for 17%...
Japanese Inflation Quickened in March, Complicating Bank of Japan Outlook
Japan’s consumer price index accelerated to 1.5% year‑on‑year in March, outpacing the 1.4% market forecast, while core inflation excluding fresh food rose to 1.8% – the first increase in five months. The uptick reflects broader price pressures from goods and...
Rates Spark: Swap Lines Imply some Pressure
The market has eased from earlier fears that a frozen Strait of Hormuz would cripple oil supplies, yet oil prices remain elevated as the closure persists and Iran refuses to negotiate without a US blockade lift. Bond yields are inching...
Turkish Central Bank Holds Rates, Remaining Cautious
The Central Bank of Turkey kept its 1‑week repo rate at 37% and left the 450‑basis‑point interest‑rate corridor unchanged. A surge in foreign‑exchange reserves added roughly $20 bn in April, lifting gross reserves to about $175 bn and net reserves to $38.6 bn....
Bank Indonesia Holds Rates, Prioritises Rupiah Stability
Bank Indonesia left its benchmark policy rate unchanged at 4.75%, matching market expectations, as fuel subsidies keep inflation near 3.5% and reduce the need for a hawkish stance. The central bank highlighted rupiah stability, noting the currency remains undervalued and...
Rates Spark: Still Positioned for a Short-Lived Shock
ING rates strategist Michiel Tukker notes that European markets expect a brief inflationary shock, keeping the 10‑year EUR swap range tight between 3.0% and 3.1% over the past month. Oil price movements continue to drive the short end of the...
UK Inflation Heads Towards 4%, but Rate Hikes Off the Table for Now
UK headline CPI rose to 3.3% in March, with core services inflation holding at 4.2%. Energy price forecasts—oil at $90‑$100 per barrel and natural gas around €55 (≈$60) per MWh—suggest inflation will hover between 3.5% and 4% through the second...
Energy Shock 2.0 – Who Breaks, Who Bends in Central and Eastern Europe
The 2026 energy shock, triggered by a major supply disruption in the Strait of Hormuz, has struck the Czech Republic, Poland, Hungary and Turkey at a fragile moment for growth, inflation and fiscal space. Unlike the 2022 shock, the current...
Poland’s Growth Outlook: So Far so Good
Poland’s economy rebounded in March after a harsh winter that crippled construction and industry. Construction output posted a modest 0.4% year‑on‑year gain, jumping 37% from February, while industrial production surged 9.4% YoY. The first‑quarter GDP is now estimated at 3.5%...
Drop in UK Unemployment Isn’t All It Seems
The UK unemployment rate slipped from 5.2% to 4.9%, but the decline stems largely from a rise in economic inactivity rather than new jobs. Private‑sector payrolls are still falling, with a 1.6% annualised drop driven by hospitality and retail. Recent...