Tag Archives: yield curve controls

We now see two additional Fed rate cuts, one in September and one in in October, versus our previous call of only one in September.We continue to expect the Federal Reserve (Fed) to cut rates by 25 basis points on 18 September.Instead of staying put at its 30 October meeting, we now think the Fed will use it to announce a further 25 bps cut, mostly due to the recent escalation of US-China trade tensions.Those two additional cuts still fit within the Fed’s vaguely-defined ‘insurance’...

While possibly helping to alleviate margin pressure on banks, raising inflation expectations remains a difficult task The Bank of Japan (BoJ) today shifted its monetary stimulus framework towards yield-curve control and away from rigid targeting of asset purchases. In essence, the BoJ will purchase sufficient Japanese government bonds (JGBs) to ensure that 10-year JGB yields are capped at about zero. The BOJ also announced that it aims to overshoot its 2% inflation target, committing itself...