06 March 2023
- The battle with inflation is still the most debated issue across the globe and major central banks are trying their hardest to keep it under control, however, it seems that the data released are still holding an unclear picture of where interest rates may end up.
- During a Racial Inequality Conference in Dallas on Thursday afternoon, Atlanta Federal Reserve President Raphael Bostic made remarks that seemed to trigger a small upswing in the market. Bostic affirmed his backing for a mere quarter-point rate hike at the next policy meeting of the Federal Reserve, in spite of the preceding week’s high inflation data. He went on to suggest that the “Fed may be able to take a break by mid to late summer.”
- Christine Lagarde, the President of the European Central Bank, suggested that there would probably be another half-point increase in interest rates at the March 16 meeting. She stated, “We have every reason to believe that there will be another 50-basis-point increase at our next meeting in March. I don’t have any reason to believe that it won’t be like that.” However, the minutes from the February policy meeting indicated that there was only limited evidence of stabilization in the underlying measures of inflation up to that point.
- In the UK, During a speech, Andrew Bailey, the Governor of the Bank of England (BoE), cautioned that policymakers may need to increase interest rates beyond 4%, but stressed that such a decision is not a foregone conclusion. He stated, “I would caution against suggesting either that we are done with increasing the Bank Rate, or that we will inevitably need to do more. Some further increase in Bank Rate may turn out to be appropriate, but nothing is decided.”