Central Bank Sentiment

Federal Reserve - Forex Central Bank Sentiment

Federal Reserve

Chair: Jerome Powell

Fed Funds Target Rate: 0.25%

Inflation Target: 2.00%

Actual Inflation: 2.4%

FOMC Statement: (15th March) The Federal Reserve is prepared to use its full range of tools to support the flow of credit to households and businesses and thereby promote its maximum employment and price stability goals. To support the smooth functioning of markets for Treasury securities and agency mortgage-backed securities that are central to the flow of credit to households and businesses, over coming months the Committee will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion.

The Committee will also reinvest all principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the Open Market Desk has recently expanded its overnight and term repurchase agreement operations. The Committee will continue to closely monitor market conditions and is prepared to adjust its plans as appropriate.

Overall Sentiment: DOVISH

Next Expected Decision: 18th March – More Stimulus

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Bank of Japan Logo - Forex Central Bank Sentiment

Bank of Japan

Governor: Haruhiko Kuroda

BOJ Policy Rate: -0.10%

Inflation Target: 2.00%

Actual Inflation: 0.7%

BOJ Statement: (21st January) The Bank will continue with “Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control,” aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner.

Overall Sentiment: DOVISH

Next Expected Decision: 19th March – No Change

Monetary Policy Overview

Bank of Canada

Governor: Stephen S. Poloz

BOC Policy Rate: 0.75%

Inflation Target: 2.00% ± 1.00%

Actual Inflation: 2.4%

BOC Statement: (13th March) – It is clear that the spread of the coronavirus is having serious consequences for Canadian families, and for Canada’s economy. In addition, lower prices for oil, even since our last scheduled rate decision on March 4, will weigh heavily on the economy, particularly in energy intensive regions.

The Bank will provide a full update of its outlook for the Canadian and global economies on April 15. As the situation evolves, Governing Council stands ready to adjust monetary policy further if required to support economic growth and keep inflation on target.

The Bank has also taken steps to ensure that the Canadian financial system has sufficient liquidity. These additional measures have been announced in separate notices on the Bank’s website. The Bank is closely monitoring economic and financial conditions, in coordination with other G7 central banks and fiscal authorities.

Overall Sentiment: DOVISH

Next Expected Decision: 15th April – More Rate cuts coming

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Swiss National Bank

Chairman: Thomas Jordan

SNB Policy Rate: -0.75%

Inflation Target: =<2.00%

Actual Inflation: 0.2%

SNB Statement: (12th December) The SNB will continue to monitor developments on the mortgage and real estate markets closely, and will regularly reassess the need for an adjustment of the countercyclical capital buffer.

Overall Sentiment: DOVISH

Next Expected Decision: 19th March – No Change

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european central bank logo - Forex Central Bank Sentiment

European Central Bank

President: Christine Lagarde

ECB Policy Rate: 0%

Inflation Target: <2.00%

Actual Inflation: 1.1%

ECB Statement: (23rd January) The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics. The Governing Council also decided to launch a review of the ECB’s monetary policy strategy.

Overall Sentiment: DOVISH

Next Expected Decision: 12th March – No Change

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Bank of England - Forex Central Bank Sentiment

Bank of England

Governor: Mark Carney

BOE Bank Rate: 0.25%

Inflation Target: 2.00%

Actual Inflation: 1.8%

MPC Statement: (30th January) Monetary policy will be set to ensure a sustainable return of inflation to the 2% target. Policy may need to reinforce the expected recovery in UK GDP growth should the more positive signals from recent indicators of global and domestic activity not be sustained or should indicators of domestic prices remain relatively weak. Further ahead, if the economy recovers broadly in line with the MPC’s latest projections, some modest tightening of policy may be needed to maintain inflation sustainably at the target.

Overall Sentiment: DOVISH

Next Expected Decision: 26th March – 0.15% Cut

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Reserve Bank of Australia Logo - Forex Central Bank Sentiment

Reserve Bank of Australia

Governor: Philip Lowe

RBA Policy Rate: 0.50%

Inflation Target: 2.00% – 3.00%

Actual Inflation: 1.8%

RBA Statement: (3rd March) The global outbreak of the coronavirus is expected to delay progress in Australia towards full employment and the inflation target. The Board therefore judged that it was appropriate to ease monetary policy further to provide additional support to employment and economic activity.

Overall Sentiment: DOVISH

Next Expected Decision: 7th April – waiting for more data

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Reserve Bank of New Zealand Logo - Forex Central Bank Sentiment

Reserve Bank of New Zealand

Governor: Adrian Orr

RBNZ Policy Rate: 0.25%

Inflation Target: 2.00% ± 1.00%

Actual Inflation: 1.9%

RBNZ Statement: (12th February) We assume the overall economic impact of the coronavirus outbreak in New Zealand will be of a short duration, with most of the impacts in the first half of 2020. The Committee agreed that ongoing low interest rates were needed to keep inflation and employment close to their mandated targets.

Overall Sentiment: DOVISH

Next Expected Decision: 25th March – 0.25% Cut

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