Fed to Hike Rates During Last Big Central Banking Week of the Year

  • Monday, December 17, 2018

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

In what will almost certainly be the last eventful week of 2018, four G10 currency central banks have policy meetings, and two other banks are releasing meeting minutes and a formal quarterly bulletin, respectively. Of the four meetings, the only policy change is likely to come from the Fed, where policymakers will likely raise rates 25 bps. The BOJ, BOE and Riksbank are all likely to hold rates.

Fed policymakers are likely to accompany the rate hike with neutral or somewhat dovish sounding language, as well as a revised Summary of Economic Projections that is likely to indicate fewer rate hikes in 2019 than previously indicated. The BOJ is likely to sound similarly dovish as they hold rates, but the most dire warnings may come from BOE policymakers, who will almost certainly express ongoing concerns about the potential impact of Brexit. Riksbank policymakers will likely take a more neutral tack in an attempt to indicate future rate hikes remain possible, even as inflation is falling. The RBA minutes will likely be uneventful considering that, yet again, the bank held rates at its most recent meeting. Finally, the SNB’s Quarterly Bulletin will reflect slowing global growth and may include downward revisions to Swiss inflation and growth.

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