Central banks fight against prices, and remain stagnant

The next one will be there central banking week. Wednesday it will be up to Fed e Thursday a Bce, BoJ e BoEwhich will remain at the window, because of the war in the Middle Eastwhich is causing i energy pricesputting the central banks in a difficult situation. THE’inflation rises and becomes worrying again. And in these cases for the central banks the best thing to do is not move and leave i rates where they are.

“When they grow up inflationary risks – the experts explain – and you don’t want to raise the ratesthe best thing is to wait to cut them, waiting to understand how the situation will evolve, at least until June, when the new president of the Fed, Kevin Warshdecidedly more pro-Trumpian than Powell“.

Waiting for the Federal Reserve’s decision

The prediction is therefore that the Federal Reserve Wednesday will keep i unchanged interest rates for the second consecutive meeting, after easing them last year to support the job marketsince the surge of oil prices exacerbates concerns aboutinflation and slow down i rate cutswhich could potentially pave the way for a new clash between the Fed e Trump in the coming months. Furthermore at this point the Fed only one will do cut in 2026instead of the two expected before war in the Middle East. Thursday Powell it will also have to explain how it intends to balance the inflationary risks with the weakening of job market. “On theinflation – explain the analysts – Powell will maintain a cautious attitude, since it is a shock that is underway and it is not yet known how long it will last and how much it will impact, while on the job market will raise signals of concern but not alarm, to avoid people thinking that there is one recession around the corner. Even in the cloud of dots only one will appear cutbecause because of the inflation risk at this moment the board cannot overbalance on two cuts“. Also the new ones will be released on Thursday inflation estimateswhich could probably jump from 2.4% in February to around 3% in March.

The Canadian central bank

The will also meet on Wednesday Canadian central bankwhich will remain firm on rateswith operators predicting a increase in interest rates by 25 basis points by the end of the year.

The decisions of the European central banks

Thursday will be an important day forEuropawith the meetings of Bcefrom the BSN Switzerland and of BoE of the United Kingdom. The surge of oil prices he put theEuropadependent on energy importsin a difficult situation. The memory of 2022, when an initial surge ininflation was considered transitory, he is still alive. “That lesson has been understood – explain the analysts – but at this point the Bce she must also be careful not to give too strong signals. The governor of the country also said so Slovak central bank Peter Casimirwho invited the Bce to stay calm, because the war in Iran and the rise in energy prices they could push her to increase rates sooner than expected.” Traders now see a 60% chance of a rate rise by June with a possible second surgery by the end of the year. “Even the inflation estimates will be interesting – add the experts – So far the Bce had given estimates for 2026 and 2027 below 2% and a convergence to 2% in 2028. Now it could estimate an acceleration in 2026 above 2% and then a slowdown in 2027, to converge towards 2% in 2028″.

The Bank of England is tax

The Bank of England it should have cut rates in March. Just a few weeks ago, this rate cut was widely expected, but given theinflation relatively rigid and new upward pressuressuch a move is now ruled out, although it remains widely priced a BoE rate cut by the end of the year.

The Bank of Japan and Takaichi’s visit

Finally the Bank of Japan should maintain i unchanged rates this week, although it is expected to proceed to a new one increase in April. The crescents inflationary pressures due to the increase in oil prices represent a particular concern for theJapanese economywhich matters almost all of its crude oil from the Gulf. All this happens while the Japanese Premier Sanae Takaichi is preparing to meet the President Donald Trump to Washington, for his first official visit to the United States after the crushing electoral victory of the beginning of the year.