Fed and ECB hold rates as energy inflation keeps December hikes in play
The Federal Reserve, European Central Bank and Bank of Japan kept rates unchanged this week as they weighed persistent inflation risks linked to high energy prices, Bloomberg and Morningstar report. Both the Fed and ECB left the door open to a December hike; Bloomberg says US price growth accelerated at the end of the third quarter, while Morningstar reports that the Bank of Canada raised rates for the first time since July 2023.
Bottom line — The Fed and ECB’s December decisions remain open, while the Bank of Canada has already resumed tightening.
Go deeper 6
-
Bloomberg reports that US growth reached its fastest pace in a year in the third quarter, driven by business investment and consumer spending.
-
Morningstar says the Bank of Japan also paused, with markets expecting a possible December increase but economists warning it is not assured.
-
Morningstar reports that New Zealand’s central bank held rates despite forecasts for another hike, while signalling further increases are likely.
-
The Economic Times reports that New Zealand, Thailand, Chile, Botswana, Malawi, Colombia and the Dominican Republic also held rates; Canada, Pakistan and Ukraine raised them.
-
Morningstar says the decisions reflected an energy shock linked to the war in the Middle East, which has interrupted global disinflation.
-
Societe Generale analysts, quoted by Morningstar, say resilient growth leaves room for Fed and ECB tightening, but the path beyond December is less clear.