Publications

With a 25bp cut widely expected, the key question is whether the Fed will frame it as a fine-tuning of its current moderately restrictive stance or as a renewed easing cycle toward a more neutral stance.

The focus of Thursday’s ECB monetary policy meeting was not so much on the interest rate decision (already priced in by analysts and markets, who expected the deposit rate to be unchanged at 2%), as on the hints that Christine Lagarde could give regarding what the central bank will do next.

In this publication you will find, on a weekly basis, our selection of the most relevant news regarding financial regulation.

The CBRT lowered the policy rate by 250bps to 40.5%, higher than the consensus of 200 bps, with also a similar size of cuts in the corridor (39%-43.5%). Considering the challenges ahead, we still maintain the view of reducing the size of the cuts going ahead after today’s decision.

The article analyzes the dangers of political interference in central bank decisions, in reference to the recent actions of the President of the United States, Donald Trump, and his attack on the institutional framework of the Federal Reserve.

Three developments shaped the Treasury market over the past month: a weak jobs report, a dovish tone from Powell at Jackson Hole, and renewed political pressure stemming from Trump’s push to replace Governor Lisa Cook from the Fed’s Board.

July U.S. labor data show sharp hiring slowdown: 73k jobs added, prior months revised -258k, jobless rate at 4.2%, participation at 62.2%. Wage growth stagnates; health care sole driver. Market sees 89% odds of Fed rate cut in September.

In its August meeting, the Central Bank's Board of Directors held its benchmark interest rate at 4.50%. In real terms, the rate stood at 2.31% , a level consistent with a neutral monetary position.