Group 1 - Mexico's central bank, Banxico, is expected to lower its benchmark interest rate by 25 basis points to 7.50% on September 25, marking the eleventh cut in a steady easing cycle due to weak economic conditions [1][2][3] - Economists are more concerned about the slow domestic economy than consumer price trends, with all 24 surveyed predicting the rate cut [2][3] - Recent economic data indicates a deceleration in growth and moderated inflation, supporting the decision for a rate cut [3][4] Group 2 - Analysts suggest that Banxico will continue to cut rates below market expectations as long as the U.S. Federal Reserve cuts rates and the U.S. dollar remains weak [5] - A majority of economists anticipate another 25 basis-point cut in November, following the September adjustment, as Banxico does not meet in October [5][6] - Projections indicate Mexico's interest rate could fall to 7.00% by the end of 2025, with further reductions expected in early 2026 [6][7]

Core Viewpoint - Sweden's central bank is anticipated to maintain its policy rate, with analysts split on expectations for a potential cut [1] Summary by Relevant Categories - **Policy Rate Expectations** - Analysts are nearly evenly divided on whether the central bank will keep the rate at 2.00% or reduce it to 1.75% [1]

Core Viewpoint - The Bank of Japan (BOJ) maintained its short-term interest rates at 0.5% but initiated the sale of risky asset holdings, indicating a gradual move towards normalizing its monetary policy [1][2]. Group 1: Interest Rate Decisions - The BOJ decided to keep short-term interest rates steady at 0.5%, with two board members dissenting and proposing an increase to 0.75% [1]. - The decision to maintain rates was unexpected, especially with the initiation of ETF sales and dissenting votes indicating a hawkish stance [3][4]. Group 2: Asset Sales - The BOJ will sell its holdings of exchange-traded funds (ETFs) at an annual pace of approximately 330 billion yen [2]. - Additionally, the central bank will sell real-estate investment trusts (REITs) at an annual pace of around 5 billion yen (approximately $33.95 million) [2]. Group 3: Market Implications - The initiation of asset sales and dissenting votes suggest a shift towards quicker normalization, which may support the yen against the U.S. dollar [4]. - The BOJ's roadmap to wind down ETF and J-REIT holdings indicates a reduction in asset-purchase support, potentially creating structural headwinds for indices like TOPIX and Nikkei [4]. - For banks, the normalization process could provide a tailwind through steeper yield curves and improved net interest margins (NIMs), assuming steady economic momentum [4].

By Leika Kihara and Makiko Yamazaki TOKYO (Reuters) - The Bank of Japan decided on Friday to start selling its holdings of risky assets and two board members voted against keeping interest rates steady, suggesting the bank would phase out its massive monetary stimulus sooner than first thought. While the central bank kept short-term interest rates at 0.5%, board members Hajime Takata and Naoki Tamura proposed, unsuccessfully, a hike to 0.75% in a move markets saw as a prelude to a near-term increase in b ...

Core Viewpoint - The Federal Reserve has reduced its benchmark fed funds rate range by 25 basis points to 4%-4.25%, marking its first reduction since December 2024, which has implications for the crypto market [1] Group 1 - The Fed's dovish outlook has led to a notable reaction in the crypto market, as analyzed by CoinDesk's Jennifer Sanasie [1]

The Bank of England held rates steady in September, extending its pattern of alternating between cuts and pauses while signaling a more unified stance than in recent months. The decision reflects a balance between acknowledging the progress made in bringing inflation lowerAnalyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own op ...

分组1 - The latest FOMC meeting revealed significant divisions among members regarding interest rate forecasts, with one member predicting a rate hike this year and another anticipating cuts of 1.25% over the next two meetings [1] - The economic projections from the Fed indicate higher inflation and growth, which contradicts the decision to cut rates, suggesting a potential failure to meet inflation targets for seven consecutive years [1][3] - The Fed's lack of clear guidance and reliance on historical data has increased uncertainty, which may hinder business investment and consumer spending [1][2] 分组2 - There is a growing call for fundamental reforms within the Fed, emphasizing the need for greater accountability and transparency to avoid groupthink [2][4] - The dispersion in members' views during the FOMC meeting indicates a lack of consensus, yet it also highlights the need for cognitive diversity to improve decision-making [4][7] - The Fed's current approach may lead to economic volatility, necessitating a clear policy anchor to guide the economy amidst significant changes in both domestic and global contexts [1][2][6]

Core Viewpoint - The Federal Reserve's dual mandate of maintaining stable prices and maximizing employment is facing increasing scrutiny, with a new bill introduced to shift focus solely to controlling inflation [1][2]. Group 1: Legislative Changes - House Financial Services Committee Chairman French Hill introduced a bill to amend the 1913 Federal Reserve Act, replacing the dual mandate with a single focus on price stability, similar to the European Central Bank [2]. - The proposed legislation aims to enhance the Fed's effectiveness by eliminating competing objectives and returning to its core responsibility of price stability [2]. Group 2: Economic Context - The introduction of the bill coincided with the Fed's decision to cut rates for the first time in 2025, primarily due to weaknesses in the job market, despite persistent inflation [4]. - Fed Chairman Jerome Powell indicated that the balance of risks is shifting away from inflation as the labor market continues to slow [4]. Group 3: Perspectives on Mandate - Former Kansas City Fed president Esther George noted that economic literature does not show significant differences in outcomes between central banks with single versus dual mandates, suggesting that dual mandates may allow for more discretion in responding to economic conditions [3]. - Stephen Miran, a new addition to the Fed board, raised questions about the Fed's mandate, highlighting a third function to promote moderate long-term interest rates alongside maximum employment and stable prices [6].

Core Viewpoint - The Federal Reserve's decision to cut its key borrowing rate by a quarter percentage point is viewed positively by the White House, indicating a cautious approach to monetary policy [1][2]. Group 1: Federal Reserve's Rate Decision - National Economic Council Director Kevin Hassett mentioned that the administration and new Fed Governor Stephen Miran advocated for a larger reduction, specifically a half-point cut, but the Federal Open Market Committee voted 11 to 1 against it [2]. - Hassett expressed that a 25 basis point cut was a broad consensus and a good initial step towards lower rates, despite Miran's preference for a more aggressive approach [3]. - President Trump has previously criticized the Fed and suggested that the benchmark federal funds rate should be 3 percentage points lower than current levels, which is not aligned with the FOMC's future policy projections [4]. Group 2: Economic Context - Despite strong economic growth above 3% in the third quarter, which typically would not support lower interest rates, Trump argues that cuts are necessary to aid the struggling U.S. housing market and manage financing costs for the nation's $37 trillion debt [5]. - Hassett emphasized the importance of assessing economic variables and making incremental reductions, suggesting that the Fed's cautious approach is appropriate given the current economic conditions [6]. - The Fed's decision reflects a balance between various economic models and opinions, with Hassett describing it as a prudent call in light of decelerating inflation that remains above the target [7].

Core Viewpoint - The Bank of England (BoE) has decided to slow down its quantitative tightening (QT) program, reducing the pace of government bond sales to minimize market volatility while maintaining its monetary policy objectives [1][4]. Group 1: Bond Sales and Market Impact - The BoE will reduce its bond sales to 70 billion pounds from 100 billion pounds over the past year, with a target to lower its bond holdings to 488 billion pounds by October 2026 [2][3]. - The decision reflects a split among policymakers, with a 7-2 vote indicating differing opinions on the pace of QT [4]. - The sales will be allocated 40% to short-dated, 40% to medium-dated, and 20% to long-dated gilts, based on their initial purchase price [5]. Group 2: Economic Context and Future Implications - The BoE's bond purchases totaled 875 billion pounds ($1.19 trillion) from 2009 to 2021 to stimulate the economy, with QT beginning in 2022 [2]. - Long-dated gilt yields have reached a 27-year high, complicating fiscal planning for the government [6]. - The QT slowdown is aimed at restoring room for future monetary stimulus and reducing market distortions [4].