The ongoing race to the bottom for currencies this year is hurtling towards a zero-sum result.
Financial markets have all but shut the door to a Federal Reserve rate hike in September, following a rout in stocks, currencies and commodities this past week, but economy watchers are only now warming up to the idea — in public at least.
Brazil’s relentless series of interest rates hikes is successfully lowering inflation expectations – despite recent signs to the contrary, from lottery to tomato prices.
The U.S. Federal Reserve may find it even more tough to raise interest rates as the year wears on if dwindling expectations for growth are any guide.
The Bank of Canada will almost certainly hold policy steady on Wednesday but nearly half of the banks who do business directly with it predict at least one more rate cut this year.
For all the measures India’s central bank has taken to increase transparency in policy making, predicting rate moves by Governor Raghuram Rajan is still difficult.
Fed Chair Janet Yellen may signal later today that she is no longer patient about when to consider raising rates but any eventual hike is likely to come after June, judging by how many key economic reports so far this year have undercut expectations.
“It could happen sooner than markets currently expect.”
That was the bomb of a headline Bank of England Mark Carney dropped in a speech on Thursday that suggested a significant change in tone at the bank.
Faith that the U.S. economy may finally be at a turning point for the better appears to be on the rise, as many ramp up expectations for a better Q2 and second half of the year.