Overview
- U.S. Fed officials, including Mary Daly and Anna Paulson, indicate comfort with holding the policy rate at 3.50%-3.75% at the Jan. 27-28 meeting after last year’s 75 bps in cuts.
- Vice Chair Michelle Bowman said the Fed should be ready to cut again if labor conditions deteriorate, calling the job market fragile and cautioning against signaling a pause in easing prematurely.
- The Fed’s Beige Book reported activity increased in most districts with hiring largely unchanged and prices rising at a moderate pace, suggesting a cautious policy stance remains appropriate.
- A Reuters poll points to a BOJ hold in January and March with a likely July hike, yet four sources say an April move is possible as yen depreciation risks broadening price pressures; the yen strengthened after Japan’s finance minister reiterated intervention remains an option.
- ECB chief economist Philip Lane said there is no near-term rate debate if the baseline holds, warning that a U.S. policy deviation or dollar-related shocks could spill over to euro-area financial conditions.