Core Viewpoint - The Reserve Bank of India's Monetary Policy Committee (MPC) is deliberating on potential changes to the benchmark interest rates amid global geopolitical tensions and the impact of US tariffs, with outcomes expected to be announced on October 1, 2025 [1] Expectations - The MPC's decision on benchmark interest rates is highly anticipated, with a report from the State Bank of India (SBI) advocating for a 25 basis points (bps) rate cut as the "optimal choice" [2] - Some analysts predict the committee may maintain the current repo rate of 5.50%, unchanged since a 50 bps reduction in June 2025, as market expectations favor holding the rate steady [2] - Nuvama Institutional Equities indicated that any decision to cut rates would be a close call, reflecting divided opinions among experts [3] - A report from Union Bank of India supports a 25 bps repo rate reduction, citing expectations of a significant downward revision in the inflation forecast for FY26 [3] Inflation - Retail inflation rose to 2.07% in August 2025, up from 1.61% in July, primarily due to higher prices of vegetables, meat, fish, oils, eggs, and personal care items [4] - This marks the first increase in the headline inflation number since November 2024, but it remains below the 4% median rate of the targeted inflation range, leading experts to believe it may prompt a policy interest rate cut next month [4] - The inflation for FY26 was previously projected at 3.1% in the August 2025 MPC meeting [4] Prior MPCs - The MPC has reduced the repo rate by a total of 100 basis points in the ongoing rate cut cycle, with reductions of 25 basis points each in February and April 2025, and 50 basis points in June 2025 [5] - The most recent MPC meeting in August 2025 resulted in the repo rate remaining unchanged [5] Upcoming MPC Schedule - Upcoming RBI MPC meetings are scheduled for December 3, 4, and 5, 2025, and February 4, 5, and 6, 2026 [6]

Group 1 - The core viewpoint of the article indicates that a majority of experts expect the Bank of Korea to maintain its benchmark interest rate during the upcoming policy meeting, with 20 out of 27 experts predicting no change and 7 forecasting a rate cut [1] - Goldman Sachs' team, led by expert Kwon Joon-ho, suggests that a dovish stance will allow the Bank of Korea to monitor household debt trends, assess the effects of fiscal stimulus, and evaluate the Federal Reserve's movements [1] - Goldman Sachs maintains its basic forecast that the Bank of Korea will implement a rate cut in October [1] Group 2 - Most experts anticipate that due to stronger-than-expected growth data in the second quarter, the Bank of Korea may slightly revise upward its GDP growth and inflation forecasts for 2025 [1]

Core Viewpoint - President Trump has intensified pressure on the Federal Reserve, specifically targeting Governor Lisa Cook, demanding her resignation amid allegations of mortgage fraud [1][2][3] Group 1: Pressure on Federal Reserve - Trump has publicly criticized Fed Chair Jerome Powell for not lowering interest rates and has now directed his ire towards Cook, calling for her resignation on social media [1] - The call for Cook's resignation follows a report by Bill Pulte, who has suggested that Cook's mortgage applications should be scrutinized more closely [1] Group 2: Cook's Response - Cook has stated that the mortgage applications in question occurred before she joined the Federal Reserve and has expressed her intention to address any reasonable inquiries regarding her financial history [2] - She emphasized that she will not resign due to what she perceives as bullying tactics [2] Group 3: Legal and Institutional Context - It remains unclear whether the Department of Justice will investigate Cook, as the President cannot arbitrarily dismiss Federal Reserve officials without just cause [3] - Cook, who was appointed during the Obama administration, is the first Black woman to serve as a Federal Reserve Governor and has recently been reappointed for a term lasting until 2038 [3]

Core Viewpoint - The Central Bank of Russia has lowered the benchmark interest rate to 18%, indicating a faster-than-expected decline in inflation and a slowdown in domestic demand, while aiming to return inflation to target levels by 2026 [1]. Group 1: Interest Rate Changes - The Central Bank of Russia announced a reduction in the benchmark interest rate from 20% to 18% [2]. - This marks a continuation of the central bank's monetary policy adjustments in response to economic conditions [1]. Group 2: Economic Indicators - The central bank noted that inflation is decreasing more rapidly than anticipated, which has influenced the decision to adjust the interest rate [1]. - There is a trend of economic activity returning to a balanced growth path, despite the slowdown in domestic demand [1]. Group 3: Future Outlook - The Central Bank of Russia plans to maintain a moderately tight monetary policy to ensure inflation returns to target levels by 2026 [1]. - Future adjustments to the benchmark interest rate will be made based on inflation expectations [1].

Core Insights - A Reuters survey indicates that 27 out of 28 economists expect the Bank of Mexico to lower the benchmark interest rate to 7.75% on August 7, while 1 economist predicts the rate will remain unchanged at 8.00% [1] Group 1 - The majority consensus among economists suggests a forthcoming interest rate cut by the Bank of Mexico [1] - The anticipated rate adjustment reflects a significant shift in monetary policy aimed at stimulating economic growth [1] - The lone dissenting opinion highlights uncertainty in the economic outlook, suggesting a cautious approach to rate changes [1]

Core Viewpoint - South Africa has lowered its benchmark interest rate by 25 basis points to 7%, aligning with market expectations [1] Group 1 - The decision to reduce the interest rate is aimed at stimulating economic growth [1] - The adjustment reflects the central bank's response to current economic conditions and inflation trends [1] - This rate cut may influence borrowing costs and consumer spending in the South African economy [1]

Group 1 - The Central Bank of Brazil's Monetary Policy Committee (Copom) decided to maintain the benchmark interest rate Selic at 15% and confirmed the end of the current rate hike cycle, citing the need for a cautious stance in a highly uncertain economic environment [1] - The announcement emphasized that the monetary policy will be adjusted as necessary based on economic conditions, with a commitment to restart the adjustment cycle if needed to achieve the inflation target of 3%, with a tolerance of 1.5 percentage points [1] - The Central Bank's June report projected a 2025 inflation rate of 4.9%, but the market expects the actual rate to be higher, indicating potential challenges in achieving inflation targets [1] Group 2 - The Brazilian economy is showing resilience, with a tight labor market, but risks remain from fiscal deficits and exchange rate volatility, along with unanchored inflation targets [1] - The global economic slowdown, tariff barriers, and commodity price fluctuations could lead to imported deflation, posing additional challenges for the Brazilian economy [1] - The recent decision by the U.S. government to impose additional tariffs on certain Brazilian exports has raised concerns about its potential impact on domestic economic and financial market uncertainty, particularly regarding price levels and foreign trade structure [1][2]

Group 1 - The Central Bank of Russia has lowered the benchmark interest rate by 200 basis points to 18% as inflation pressures decrease faster than expected [1] - The Central Bank aims to maintain a tight monetary policy to ensure inflation returns to target levels by 2026, with average benchmark rates projected between 18.8% to 19.6% in 2025 and 12.0% to 13.0% in 2026 [1] - The Central Bank forecasts that under the current monetary policy, the annual inflation rate will decline to 6.0% to 7.0% in 2025 and to 4.0% in 2026, stabilizing thereafter [1] Group 2 - Despite the decrease in inflation risks, the Central Bank notes that medium-term inflation risks remain higher than deflation risks, influenced by long-term deviations from balanced growth and external trade environment deterioration [2] - Geopolitical tensions are highlighted as a significant source of uncertainty that could impact inflation through changes in the ruble exchange rate [2] - The Central Bank previously reduced the benchmark rate from a historical high of 21% to 20% on June 6, 2023, and plans to discuss the next rate level in a meeting on September 12 [2]

Core Viewpoint - The Central Bank of Russia has lowered the benchmark interest rate to 18.00%, aligning with market expectations and down from the previous rate of 20% [1] Group 1 - The decision to reduce the interest rate reflects the Central Bank's response to economic conditions [1] - The new rate of 18.00% is aimed at stimulating economic growth and addressing inflation concerns [1] - This adjustment marks a significant shift in monetary policy as the Central Bank seeks to balance economic stability and growth [1]

Core Viewpoint - The discussion around the assessment of monetary supply tightness and the appropriate benchmark interest rate for the Federal Reserve has intensified as excess liquidity in the U.S. financial system is expected to continue shrinking in the coming months [1][3]. Group 1: Federal Funds Rate Limitations - Several experts, including Cleveland Fed President Mester and JPMorgan analyst Teresa Ho, have pointed out the limitations of the federal funds rate as a measure of liquidity, suggesting that the Fed should consider alternative tools [1][3]. - The federal funds market, once a key indicator of financing conditions, has seen a significant decline in daily trading volume, now averaging about $110 billion, which is only 0.5% of commercial bank assets, compared to 2% before 2008 [1]. - The overnight general collateral repurchase agreement rate has become a more significant pricing basis for benchmark rates, with daily trading volumes reaching several trillion dollars [1]. Group 2: Shift in Monetary Policy Tools - The true levers of monetary control have shifted to a series of rates set directly by the Fed, including the Interest on Reserve Balances (IORB), rather than relying solely on the federal funds rate [3][4]. - The federal funds rate has remained relatively stable at 4.33% as of July 23, despite adjustments to policy rates, indicating a disconnect from actual market dynamics [3][4]. - Experts argue that the federal funds rate is no longer at the core of monetary market dynamics, raising concerns about its ability to signal potential liquidity pressures [3][4]. Group 3: Current Market Conditions and Future Outlook - The market is facing potential liquidity pressures as the U.S. Treasury slows cash reserve rebuilding, with expectations that the use of reverse repo tools may approach zero in September [5][7]. - Historical context shows that in 2019, the Fed's balance sheet reduction led to significant rate spikes due to insufficient bank reserves, highlighting the importance of monitoring reserve levels [5]. - Experts suggest that alternative indicators, such as the three-party general collateral rate (TGCR), may better reflect real funding flows and should be considered as replacements for the federal funds rate [7].