Fed Meeting: December 18, 2024
As expected, the Fed announced last week another 25 basis point interest rate cut (the third consecutive cut this year), leaving the deposit facility rate in the 4.25–4.5% range. This decision, which Powell noted was a more difficult choice for FOMC participants than previous ones, with one dissenting vote (Cleveland Fed President Beth Hammack), was […]
ECB Meeting Analysis: December 12, 2024
At the last meeting of the year, as widely anticipated, the ECB announced another 25 basis point interest rate cut (the third consecutive cut and the fourth this year), leaving the deposit facility rate at 3%, down from 4% at the beginning of the year. Although there was some discussion about the possibility of a 50 basis […]
Germany’s Economic Outlook: Political, Fiscal and Trade Challenges
After months of internal conflict within the three-party coalition between Olaf Scholz’s SPD (centre-left), the environmentalist Greens and the liberal FDP, over Germany’s economic difficulties and possible solutions, the coalition finally collapsed in the first week of November. The breakdown was triggered when Scholz dismissed Finance Minister Lindner, who is also the leader of the […]
Analysis of the ECB Meeting of 17 October 2024
As expected, last week the ECB announced a 25 basis point (bps) rate cut, bringing the deposit facility rate to 3.25%. The decision was based on recent economic data showing that inflation is converging towards the target and that inflationary pressures, particularly in the labour market, are easing as a result of weaker-than-expected growth. When asked whether […]
United States: A Guide to the November Elections
2024 will be a crucial year for American politics. Not only will Americans vote to elect a new composition of Congress, but they will also elect a new President who will begin a new four-year term in January 2025. Although early voting has already begun in several states, the majority of Americans are expected to […]
Analysis of the ECB Meeting of 12 September 2024
The outcome of the September meeting was broadly in line with expectations. The ECB announced a unanimous 25 basis point rate cut, bringing the deposit facility rate to 3.50% (the second cut of the year). The decision was also accompanied by a new set of economic projections. The decision was supported by the latest inflation […]
Sahm Rule, Carry Trades and Market Volatility
The week beginning on 5 August was marked by significant volatility across financial markets, driven by a combination of factors outlined below: 31/07/2024 The Bank of Japan announced its second increase in the policy interest rate, raising it by 25 basis points to 0.25%. The announcement led to an appreciation of the Japanese yen and […]
Analysis of the ECB Meeting of 18 July 2024
Last week, the ECB held its fifth meeting of the year and, as expected, the European Central Bank unanimously decided to keep interest rates unchanged. While markets were hoping for signals of a possible rate cut in September, they received (almost) none. Lagarde, both in the official statement following the meeting and during the post-announcement […]
Analysis of the ECB Meeting of 6 June 2024
Last week, as expected, the ECB cut the key interest rate by 25 basis points, ending the tightening cycle and leaving the deposit facility rate at 3.75%, below the record high of 4% reached in September last year. Lagarde mentioned at the post-meeting press conference that this decision, which followed the May inflation reading that […]
Analysis of the ECB Meeting of 6 June 2024
Last week, as expected, the ECB cut the key interest rate by 25 basis points, ending the tightening cycle and leaving the deposit facility rate at 3.75%, below the record high of 4% reached in September last year. Lagarde mentioned at the post-meeting press conference that this decision, which followed the May inflation reading that […]