US #CentralBank holds #InterestRates steady

#TheFed said it will slow the pace of the drawdown of its balance sheet, as it faces challenges in assessing #market liquidity….

Stmnt: "The Cmte will continue reducing its holdings of #Treasury #securities & agency #debt & #mortgage‑backed securities. Beginning in April, the Cmte will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25B to $5B."

#economy
https://www.reuters.com/world/us/fed-meeting-live-us-stocks-open-higher-investors-eye-rate-decision-2025-03-19/

Rents jumped 4.6% from last year, accounting for nearly 30% of January's #inflation increase. A finance professor explains why proposed #tariffs on Canadian lumber could further drive up homebuilding costs and rents. https://theconversation.com/inflation-249815
#interestrates

Hmmm.... annual inflation in January rose from 2.5% in December to 3% in January.... pushing it well above the BoE's target.

Andrew Bailey will emphasise the persistence of 'inflationary pressures', but this also suggests even on its own terms the sado-monetarists policy of high interest rates is not really working.

This might tell us inflation is being (partly) imported, but also that interest rate policy is not (actually) about inflation but about 'disciplining' workers!

Today's headlines will say wage growth (year on year) has risen to 6% (although once we allow for inflation, growth in real wages is nothing like that).

But the real issue is are real wages back to what they were before 2008, allowing workers to make up for a lost 15 years of falling living standards?
The answer is, for many, no!

So when Andrew Bailey & Rachel Reeves warn us that this stokes 'inflationary pressures' recall whose ever increasing wealth is ignored!

#australia #InterestRates #News

https://www.abc.net.au/news/2025-02-18/reserve-bank-interest-rate-decision-rba/104949390?utm_source=abc_news_app&utm_medium=content_shared&utm_campaign=abc_news_app&utm_content=other

The UK's GDP 'grew' by 0.1% last quarter... essentially flat-lining.

Its a reminder that rather than blame Rachel Reeves for failing to (immediately) stoke an expansion of economic activity in the UK, we should be putting this at the feet of the Bank of England whose specific(!) policy has been to keep interest rates high(er) to dampen down economic activity & 'squeeze' inflation out of the UK' economic system.

But they, as always, escape the blame in the media!

I feel tempted to say 'I told you so'... as predicted the Bank of England's sado-monetarists are rolling out the persistent inflationary pressure narrative to justify few if any further interest rate cuts this year....

{too many of you are still trying to repair your living standards; know your place peasants, and until you do we're going to cripple you with higher mortgage payments!}

#InterestRates

https://www.theguardian.com/business/2025/feb/07/uk-inflation-bank-of-england-huw-pill-interest-rates

As widely expected the BoE cut interest rates to 4.5%;

Their project to undermine economic activity (to 'squeeze' inflation out of the system) is working well; their growth forecast down to less than 1% this year (which is within the margin of error for a recession).

But, the sado-monetratists friends continue to absolve the BoE from blame & put it at Reeves' feet (unjustly), while Bailey (as predicted) also noted continuing inflationary pressure(s).

More pain to come!

#InterestRates
h/t FT

Q. will BoE announce a cut in interest rates today?

If so, does this indicate that the sado-monetarists think we have suffered enough to 'squeeze' inflation out of the UK economy?

No; if they do cut, it'll only be down to a likely 4.5%, with an added narrative that potential inflationary pressures remain & so we shouldn't expect rates to drop below 4% this year...

In other words: we all need to still suffer more, but we (the MPC) want to offer you some (false) hope of relief!

As Trump continues to fail to understand how tariffs actually work, Americans can expect inflation, interest rates and unemployment to start rising again.

The Royal Mail has got clearance from its regulator (OFCOM) to cut back on second-class deliveries (indeed they seem to be encouraging such a move)... so one Q. is:

If a service is cut, encouraging those wanting to use the post to more often go first class, does this count as 'shrinkflation' in services & so, essentially inflationary?

I'm sure the sado-monetarists in Threadneedle St. will be adding it to the 'inflationary pressures' that delay any further interest rate cuts.

Some ideas about lowering #USdebt from @pluralistic that add up to:

"$1.4215t/year without even breaking a sweat, just by tacking (some of) the country's worst looting and tax evasion." "There's plenty of scenarios where interest payments result in the remaining $580b/year in savings, bringing the total up to $2t." "Now, sucking $2t/year out of the US economy all at once..." would hurt the economy, so best to phase cuts in over time.

https://pluralistic.net/2025/01/27/beltway-bandits/#henhouse-foxes

Hmmm.... as business groups start to cut staff, but blame higher wages on the pay floor (and required further promotion 'incentives') caused by the minimum wage, I'm expecting Andrew Bailey & the BoE/MPC to say that while they want to cut interest rates, they need some indication from Labour that the next uplift in the minimum wage will be capped.

I'll happily be proved wrong, but on past evidence they'lll be casting round for reasons not lower rates yet.

Headline: IMF upgrades UK growth forecast...

Reality: its been upgraded from 1.5% to.... 1.6%.

However, its based on the idea that the BoE will make four(!) interest rate cuts this year, bringing interest rates down 3.75% by the end of 2025.

Well, to be frank, as you will know I think its pretty unlikely Bailiey & his sado-monetarists will do such a thing, so I think the IMF's forecast can be treated with a pinch of salt.

Inflation has slowed (a little) to 2.5% last month... however, if you think this will prompt any acceleration in the BoE's professed (but hardly actioned) intent to reduce interest rates, prepare for Andrew Bailey in the media today to be out identifying a range of other 'inflationary pressures' that will still mean rates cannot be dropped just yet....

The sado-mometartists still don't think we have suffered enough!

ICYMI:

We've seen a lot of commentary linking Rachel Reeves' autumn budget, to the current economic slowdown (often linking this to business sentiment).... but, its unlikely that as yet un-enacted tax changes would have already had an impact.

No, if you want to know why the UK is in a quasi-recession, then a better place to look is the Bank of England's interest rate policy of the last 18-24 months that has economic slowdown as its explicit aim!

#InterestRates

https://northwestbylines.co.uk/politics/economy/is-rachel-reeves-budget-the-real-cause-of-the-latest-economic-slowdown/

We've seen a lot of commentary linking Rachel Reeves' autumn budget, to the current economic slowdown (often linking this to business sentiment).... but, its unlikely that as yet un-enacted tax changes would have already had an impact.

No, if you want to know why the UK is in a quasi-recession, then a better place to look is the Bank of England's interest rate policy of the last 18-24 months that has economic slowdown as its explicit aim!

#InterestRates #BankOfEngland

https://northwestbylines.co.uk/politics/economy/is-rachel-reeves-budget-the-real-cause-of-the-latest-economic-slowdown/

So, let me get this right;

after 18-24 months of trying to engineer a recession to reduce inflation (and now with inflation circling the target headline rate) the sado-monetarists of Threadneedle St. are not reducing interest rates *because* the UK looks to be in a recession....

so, interest rates cannot go down when inflation is high, or low, and they cannot go down the the UK is 'running hot' or is in a recession....

Your mortgage won't be getting any cheaper any time soon!