Dear friends and colleagues:
The CFR Global Monetary Policy Tracker is updated.
Once again, all the major reserve-currency issuing central banks have held their policy rates steady over the past month. The Fed held at 3.63%, the ECB at 2.25%, the PBoC at 3%, the BoJ at 1%, the BoE at 3.75%, the Bank of Canada at 2.25%, and the Reserve Bank of Australia at 4.35%. With our algorithm now reclassifying Australia from a hiking to a neutral posture, our CFR Index of Global Easing (-)/Tightening (+) falls slightly to +2.72/10—modest tightening.
The big story in monetary policy last month was Kevin Warsh’s Jackson Hole speech, since which the market’s probability estimate for a Fed rate hike on September 16 has climbed from 36% to 68%. All eyes are now on the August Consumer Price Index report, scheduled for release on September 11, which may need to undercut expectations for a 3.3% year-on-year rise in order to keep the Fed on hold.
Please be sure also to check out our CFR Global Inflation Tracker, which covers nearly 200 countries over the past quarter century.
Sincerely,
