This week, the Reserve Bank of Australia held its policy rate steady at 4.35% and offered policy guidance that was more hawkish than expected. In Japan, the underlying details of the December wage data, as well as encouraging signs surrounding the ongoing spring wage negotiations, keep the central bank on course for an April rate hike, in our view. Mexico's central bank held rates steady, but less hawkish language in its statement suggests it could cut rates in March.
It was a busy week for economic data, but Friday's employment report stole the show. Nonfarm payrolls rose 353K in January, almost double the consensus expectation. While we suspect the Federal Reserve will put more weight on the Employment Cost Index's soft reading on labor cost growth in Q4, the pickup in average hourly earnings and overall strength in hiring suggest the odds of a rate cut in March are quickly fading.
The Federal Reserve on Wednesday did it again. For the fourth meeting in a row, it left its key interest rate at a 22-year-high, as Fed observers and market watchers placed bets on when the central bank would start cutting rates in the coming months.
The Federal Reserve on Wednesday did it again. For the fourth meeting in a row, it left its key interest rate at a 22-year-high, as Fed observers and market watchers placed bets on when the central bank would start cutting rates in the coming months.
The Federal Reserve on Wednesday did it again. For the fourth meeting in a row, it left its key interest rate at a 22-year-high, as Fed observers and market watchers placed bets on when the central bank would start cutting rates in the coming months.