Fed and ECB Talk Tightening as IMF and World Bank Meet

  • Monday, October 9, 2017

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

The IMF and World Bank meetings in Washington D.C. will be the focus of most of the economics world this week. Nevertheless, the FOMC minutes released on Wednesday will garner a fair bit of attention as they could reveal the Committee’s appetite for another rate hike before year-end. Considering the hawkish shift in rhetoric since the FOMC meeting, it is likely that the minutes will err a bit hawkish. Conversely, ECB policymakers have recently shifted dovish despite continued talk of tapering asset purchases. The 11 scheduled speeches from ECB policymakers this week will provide ample opportunity to clarify their plans, but recent trend indicates that any tapering is likely to be extremely gradual.

Growing stagflationary pressures have caused BOE policymakers to sound a bit more dovish recently as they face the quandary of potentially needing to hike rates to curb above target inflation, even if that policy move will drive growth toward recession territory. While this week’s surveys will reveal the relative strength of credit in the UK, they are unlikely to clearly signal if policymakers intend to hike rates anytime soon.

In recent weeks, the RBA has sounded the most hawkish of all G10 banks, despite stabilizing real estate prices that may even be declining from bubble territory. This week’s speech by Deputy Governor Debelle is likely to be less hawkish than other recent rhetoric from RBA officials, but it could signal tighter policy to come. Norges bank policymakers are similarly likely to provide a somewhat hawkish signal as Norwegian economic conditions continue to strengthen, increasing the likelihood of a 2018 rate hike.

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

The Prattle Team

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