U.S., Europe and Japan hold rates; pace of Japanese hikes in focus
The central banks of the United States, Europe and Japan all held their policy rates at their latest meetings. The U.S. Federal Reserve offered no clear signal alongside its hold. With the midterm elections and upcoming economic data due next week, expectations were that the path of rates in December could depend on data released from here.
The European Central Bank also held rates, but news that President Christine Lagarde would step down before the end of her term added uncertainty. Her term was understood to run until October next year, and the prospect of a change in central bank leadership during a volatile period drew market attention.
The Bank of Japan kept rates unchanged while reaffirming its intention to continue raising them over the medium to long term. Following Japan’s declaration that deflation had ended, markets are focused more on the pace of rate increases than on whether they will occur, with quarterly hikes in December or next March among the possibilities being discussed. It was also noted that a clearer assessment would require the governor’s press conference and subsequent remarks.