The prospect of the Fed shrinking its balance sheet may see the bond market react differently to economic data than we might expect.
Global central bank roundup: while the Federal Reserve moves towards normalisation of interest rates, it appears to remain a remote prospect for Japan and the UK.
The Indian central bank’s decision to hold rates at 6.25% confounded market expectations of a cut, but was in line with our view following what seems like only a limited impact of demonetisation on growth.
At our latest Schroders Live event on 13 January, our expert panel discussed major themes in markets, including the recent rotation, likely impact of Donald Trump, and the prospects for emerging markets.
Preceded by lower-than-expected inflation earlier in the day, the decision by the Brazilian central bank to cut interest rates by 75 basis points (bps) instead of the 50 bps forecast was a surprise that had been a while in the making.
After years of deflationary dynamics, energy inflation is set to lift European and UK inflation significantly over the next few months. However, the energy effects will only be temporary and will have a deflationary impact in the medium term.