Global Monetary Policy Tracking - The global interest rate landscape shows that central banks are in a cautious wait-and-see mode due to geopolitical risks, with only 4 out of 26 major economies lowering rates and 1 raising rates from February 1 to March 25, 2026 [2][13] - Financial markets have begun pricing in interest rate hikes from the US and European central banks since March, indicating a tightening trade, with expectations for the Federal Reserve to potentially not lower rates this year [2][20] - China's nominal interest rates remain the lowest among 13 global economies, with actual rates significantly declining, dropping to 1.36% and 1.41% in February and March, respectively, down from 2.25% in January [4][25] Global Liquidity Tracking - The Federal Reserve's liquidity indicators are in a healthy state, with reserve balances stabilizing at the lower end of the acceptable range, approximately 10% of GDP as of March 18, 2026 [5][28] - Recent liquidity signals indicate a further repair of liquidity spreads, with the EFFR-IOER spread remaining stable at -1bp, suggesting a stable liquidity environment [7][35] - There are signs of liquidity shocks in global financial markets, with significant increases in bond bid-ask spreads due to geopolitical tensions, and rising credit risk premiums across various regions [9][41][51]

Group 1: Global Monetary Policy Trends - From February 1 to March 25, 2026, only 4 out of 26 major economies lowered interest rates, while 1 economy (Australia) raised rates, indicating a cautious stance among central banks amid geopolitical risks[1] - As of March 25, market expectations suggest that the Federal Reserve may not lower rates this year, a significant shift from earlier expectations of two rate cuts[2] - The European Central Bank (ECB) is now expected to raise rates 2-3 times this year, up from initial expectations of maintaining rates[3] Group 2: Interest Rate Comparisons - China's nominal interest rates remain the lowest among 13 major economies, averaging around 1.8% in February and March 2026, while global rates have risen due to geopolitical tensions[4] - China's real interest rates have significantly declined, averaging 1.36% and 1.41% in February and March 2026, down from 2.25% in January, ranking 5th among the 13 economies[5] Group 3: Liquidity Tracking - The Federal Reserve's reserve balance has increased to nearly $3 trillion, with reserves to GDP ratio at approximately 10%, within the acceptable range of 10%-12%[6] - Liquidity indicators show a stable environment, with the EFFR-IOER spread remaining at -1 basis point since the beginning of the year, indicating a healthy liquidity state[7] - Recent liquidity shocks have been observed in global financial markets, with U.S. and Japanese government bond spreads widening significantly due to geopolitical tensions[8]

Global Monetary Policy Shift Tracking - The Federal Reserve has lowered interest rates by 25 basis points to a range of 3.75%-4% in September 2025, aligning with market expectations. Seven out of 26 major economies tracked have cut rates, with the European Central Bank (ECB) maintaining a hawkish stance despite not changing rates for the third consecutive time [2][11] - There is uncertainty regarding further rate cuts by the Federal Reserve within the year. Initially, there was a strong expectation for cuts in October and December, but this has since cooled, with only a 70% probability for a December cut as of late October [3][17] - China's real interest rate has slightly decreased from 3% at the end of September to 2.9% in October 2025, remaining relatively high compared to 13 other economies [3][26] Global Liquidity Tracking - The Federal Reserve's reserve balance has decreased to $2.83 trillion, with a nominal GDP ratio of approximately 12%, indicating that redundant liquidity is nearly exhausted. The ONRRP balance has significantly shrunk to $19.5 billion [4][30] - Various liquidity spreads have shown significant increases, with the EFFR-IOER spread narrowing from -7 basis points to a minimum of -3 basis points, reflecting tightening liquidity conditions [5][37] - The U.S. Treasury bond bid-ask spread has remained stable, indicating that the bond market has not experienced significant widening despite the liquidity tightening from the Fed's balance sheet reduction [7][43] Financial Market Liquidity Tracking - The Libor-OIS spread has risen sharply, reaching a maximum of 110 basis points, indicating tightening liquidity conditions in the U.S. dollar market. However, offshore dollar swap points remain low, suggesting ample liquidity in offshore markets [8][45] - Credit risk premiums in the U.S. have remained low despite recent regional banking credit events, with investment-grade credit default swap (CDS) prices showing only slight increases [8][51]

Global Monetary Policy Tracking - The major central banks of the US, Eurozone, and Japan have maintained their interest rates unchanged as of July 2025, with the Federal Reserve holding rates at 4.25%-4.5% [2][12] - The expectation for rate cuts in the US has decreased, with the anticipated number of cuts dropping from nearly 3 in early July to less than 2 by the end of July, and the probability of a September cut falling from 90% to about 40% [3][19] - In the Eurozone, the expectation for a rate cut has also cooled, with the probability of a September cut decreasing from 42% to approximately 10% [3][19] - Japan's central bank has maintained its policy rate unchanged for the fourth consecutive time, with inflation expectations being revised upwards [3][15] Global Liquidity Tracking - The Federal Reserve's balance sheet has contracted, with reserves shrinking by $57.7 billion since the beginning of the tapering process, and a monthly reduction of $47.6 billion in July 2025 [4][27] - The liquidity in the non-bank sector is tightening, as indicated by the frequent positive spread between SOFR and EFFR rates, reflecting a significant liquidity squeeze in non-bank institutions [4][30] - The liquidity premium in the US dollar market remains elevated, with the Libor-OIS spread maintaining a high level, indicating that liquidity is still ample despite some tightening [6][40] Credit Risk Premium - Since July 2025, the OAS of US high-yield credit bonds and the CDS prices for high-yield and investment-grade bonds have seen a slight increase, indicating a rise in credit risk premium [9][45] - In contrast, CDS prices for credit bonds in Europe, Japan, and Asia remain low, suggesting a relatively stable credit environment outside the US [9][45]

Group 1: Global Monetary Policy Overview - The major central banks of the US, Eurozone, and Japan have maintained their interest rates unchanged as of July 2025, with the Federal Reserve holding rates at 4.25%-4.5%[2] - In July 2025, 4 out of 26 tracked economies reduced interest rates, down from 6 in June 2025[2] - The European Central Bank (ECB) paused its rate cuts after seven consecutive reductions, while the Bank of Japan has also kept its policy rate unchanged for the fourth consecutive time[2] Group 2: Interest Rate Expectations - The Federal Reserve's expectation for rate cuts has cooled, with the anticipated number of cuts for the year dropping from nearly 3 in early July to less than 2 by the end of July[3] - The probability of a rate cut in September for the Federal Reserve decreased from 90% to about 40% but rebounded to nearly 90% in early August due to significant downward revisions in US non-farm payroll data[3] - The ECB's rate cut expectations fell from a forecast of one more cut in July to no cuts by the end of July, with September cut probability dropping from 42% to approximately 10%[3] Group 3: China's Interest Rate Position - China's nominal interest rate increased slightly, leading to a rise in real interest rates from 3% in June to 3.1% in July 2025, placing it at the 69th percentile historically since 2014[3] - China's real interest rate ranking among 13 major economies has dropped to 10th place in 2025, down from 11th in 2024[3] Group 4: US Federal Reserve's Balance Sheet and Liquidity - As of July 30, 2025, the Federal Reserve's reserves have shrunk by $57.7 billion compared to pre-tightening levels, with a monthly reduction of $47.6 billion in July[4] - The use of the discount window has increased, indicating potential liquidity stress among some smaller banks[4] - The SOFR-EFFR spread has frequently turned positive since 2025, reflecting tightening liquidity conditions for non-bank institutions[5] Group 5: Global Financial Market Liquidity - The bid-ask spread for US 10Y Treasuries has increased, indicating tighter supply-demand conditions, with the spread at the 66th percentile historically since 2001[6] - Credit spreads for high-yield bonds in the US have slightly widened since July, while spreads in Japan, Europe, and Asia remain low[6]