Analyzing This Week’s Fed Rate Hike

  • Monday, September 24, 2018

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The Most Important Central Bank Releases This Week
central bank communications analytics research

Out of the several active G10 currency central banks this week, markets will likely pay the most attention to the Federal Reserve, but not because policymakers are expected to hike rates 25bps. Instead, the focal point will likely be the rate path forecast, which could indicate an additional hike before year-end. The only other G10 central bank holding a policy meeting this week is the RBNZ, which is likely to hold rates due to Q2 growth staving off pressure to ease policy.

In their speeches this week, Mario Draghi and other ECB policymakers will likely focus on the long term path to policy normalization—particularly, when it may be appropriate to raise rates—and carry a neutral tone while doing so. The BOJ meeting minutes released this week are likely to provide some context to the bank’s recently reduced asset purchases, but Kuroda will likely soften any perceived hawkishness with assurances that policymakers will maintain an accommodative policy stance. At the Bank of Canada, Governor Poloz will deliver a speech that could indicate whether BOC policymakers view elevated inflation as a great enough concern to hike rates in the face of other indications of economic weakness and ongoing trade uncertainty. Governor Olsen of the Norges Bank faces a similar challenge as he looks to indicate the future rate path after last week’s rate hike.

Three BOE policymakers are set to speak, though none are likely to make waves and all are likely to at least tangentially address ongoing concerns about Brexit. Finally, the SNB will issue its balance of payments, which is likely to indicate significant currency market intervention to protect the CHF from further appreciation.

This is an abbreviated version of the Cyborg Analyst. The full weekly report contains detailed analysis based on Prattle’s Central Bank Analytics. Subscribe here.

The Prattle Team

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