NAB Morning Call
All systems go for a Fed cut next week
Dec 11, 2024
In this engaging discussion, Gavin Friend, NAB's market economist, unpacks the intricacies of global monetary policy. He analyzes the Fed's imminent decision on interest rate cuts and delves into the Bank of Canada's recent moves, highlighting their effects on economic indicators. Friend also examines the challenges central banks face amid contradictory policies and shares insights on upcoming Australian employment data. Tune in for a deep dive into the complex dynamics shaping our financial landscape!
15:11
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Quick takeaways
- The Bank of Canada executed a 50 basis point rate cut to shift towards a neutral monetary policy amid stable inflation indicators.
- Recent U.S. inflation data suggests limited scope for monetary tightening by the Fed, complicating future rate-setting decisions with ongoing inflationary pressures.
Deep dives
Central Bank Rate Cuts and Economic Outlook
The Bank of Canada implemented a 50 basis point rate cut, marking its fifth cut as it aims to transition to a more neutral monetary policy. This adjustment comes as inflation data from the U.S. indicates stability, with expectations that the Fed will follow suit with its own rate cut next week. Speculation surrounds both the RBA and the Bank of England, as their current positions contrast with other central banks that are more willing to reduce rates. The broader implications of these adjustments suggest a cautious approach from central banks as they attempt to balance economic stimulation and inflation control.
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