Global Rate-Cut Juggernaut Is Struggling to Start

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(Bloomberg) -- Central banks cagey about joining the global interest-rate cutting cycle may reveal themselves this week with a quartet of decisions in...

-- Central banks cagey about joining the global interest-rate cutting cycle may reveal themselves this week with a quartet of decisions in advanced economies.Days after the Federal Reserve pared back projections for US monetary easing this year, policymakers from the UK to Australia are likely to signal that they’re still not convinced enough about disinflation to start lowering borrowing costs themselves.

Decisions elsewhere may showcase the different stages of global monetary cycles, with Brazil and Paraguay expected to keep borrowing costs on hold, and Chile anticipated to slow rate cuts.“Major central banks look set to keep interest rates on hold, having looked more likely to cut only a few weeks ago. The BOE is almost certain to keep policy unchanged in June ahead of the UK election. It’s a closer call for the SNB.

On Thursday, housing starts data may show a modest increase in May construction from a month earlier as builders adjust to swings in underlying demand while staying diligent on inventories. A day later, the Reserve Bank of Australia is expected to hold its cash rate target at 4.35%, with focus falling on how authorities view the inflation trajectory after consumer price growth unexpectedly picked up in April.

Japan trade data on Wednesday may show growth in exports accelerated in May to the fastest clip since November of 2022. The same day, Norway’s central bank is widely expected to keep its rate at 4.5% for the fifth straight meeting. Investors may focus on how much improving economic activity and higher wage pressure will delay plans to reduce borrowing costs, with some suggesting no action until next year.

Another key event, taking place against the backdrop of last week’s market turmoil afflicting France, will be the release of the European Commission’s verdict on Wednesday admonishing countries in the region for breaching its 3% deficit limit. In Mexico, much of the focus will be on the presidential transition from Andres Manuel Lopez Obrador to Claudia Sheinbaum and potential policy implications that have rattled investors.

Analysts now see the key rate at 10.25% come year-end 2024, representing a 125 basis-point increase in the rate forecast since March, while the swaps market is now actually pricing in tightening toward year-end.Trump Couldn’t Stop Gibbering in Front of Nation’s Biggest CEOs Anthony Fauci has a new book plan and detailed one conversation with trump where the president said he “loved” him, but also expressed anger with the doctor.WASHINGTON — Three months into the coronavirus pandemic, Dr. Anthony Fauci was at home in northwest Washington when he answered his cellphone to President Donald Trump screaming at him in an expletive-laden rant. He had incurred the president’s wrath by remarking that the vaccines under development might not provide long-lasting immunity.

 

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