NAB Morning Call Five central banks in the last gasp before Christmas
Dec 15, 2024
Ray Attrill, NAB’s market economist and strategist, breaks down the critical actions of central banks, predicting rate cuts by the Fed and Riksbank, while others hold steady. He analyzes China's stagnant bank loan growth, urging a balanced fiscal policy for recovery. The discussion also touches on Japan's economic indicators and the cautious monetary approach due to political challenges. Finally, Attrill highlights the widening economic gap between the US and Europe as PMI data looms, with France facing credit downgrades amid economic struggles.
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China's Slowing Loan Growth
- Chinese bank loan growth has slowed despite government stimulus efforts focused on increasing lending.
- Monetary policy easing has been ineffective in encouraging borrowing from households or corporations.
BOJ's Policy Inaction
- The Bank of Japan (BOJ) is expected to maintain its current policy despite data suggesting a move towards normalization.
- Political factors and the government's need to pass a supplementary budget are likely influencing the BOJ's decision.
Rising Treasury Yields
- Rising treasury yields are partly due to market anticipation of a slower pace of Fed rate cuts next year.
- The market expects the Fed's new dot plot to remove at least one rate cut currently projected for 2025.