Archive

February 05, 2026
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BoE: Presumptive Doves Fly

  • The MPC held rates in a shockingly finely balanced 5:4 vote again. Assumptions in the analytical boxes were uniformly dovish and widely cited as driving the dovish flight.
  • We see target-consistent wage growth lower, only partly because of productivity. Fiscal policy will not match tight plans, and elevated expectations can’t be assumed away.
  • Only one of the two members open to cutting soon is needed to deliver it. We no longer see enough time for dovish assumptions to be disproved, making a late April cut likely.

By Philip Rush

February 05, 2026
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ECB Holds in a ‘Good Place’

  • The ECB holds rates at 2%, as expected, signalling a high bar for moves and reinforcing a data‑dependent, meeting‑by‑meeting stance.
  • Inflation is below 2%, but core and wages are still firm, keeping easing and tightening risks balanced, and anchoring a “higher for longer” bias.
  • A stronger euro, global demand shocks or sticky services inflation will be decisive for any future shift away from the current rate plateau.
February 03, 2026
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Fed: Rate Cuts Rolling Away

  • Pricing for Fed rate cuts in 2026 has been trimmed by ongoing economic resilience and a fairly uncontroversial appointment of Kevin Warsh as the Fed’s next Chair.
  • Mean pricing still covers two cuts, close to the BoE, despite both being on hold and some other central banks turning hawkish. Delaying cuts until mid-year isn’t enough.
  • We see excess demand and inflation surviving, preventing policy easing. Trump’s Chair can sell this stability. Temporal decay of the dovish skew would also roll rate cuts away.

By Philip Rush

February 03, 2026
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RBA Hikes Into Inflation's Resurgence

  • The RBA hiked by 25bp to 3.85%, above some expectations, as inflation reaccelerated and is judged likely to remain above target.
  • Stronger-than-expected private demand, a tight labour market and high unit labour costs raise the risk of further rate hikes if inflation stays sticky.
  • Future moves are data-dependent: further tightening remains on the table, but an extended pause is possible if inflation and demand clearly ease.

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