Interest rates - Azzet - Business news, investments companies & executives

Sign inJoin Now

Interest rates

Interest rates
Fed delivers third cut; signals slower path ahead
The United States Federal Reserve approved its third interest rate reduction of the year on Wednesday (Thursday AEDT), but the move underscored deep divisions within the central bank and hinted at a far more cautious pace of easing ahead. In a 9-3 decision, the Federal Open Market Committee (FOMC) lowered its benchmark federal funds rate by a quarter percentage point to a range of 3.5%-3.75%, delivering what markets had widely dubbed a “hawkish cut”. The decision was accompanied by an unusually large number of dissents, highlighting an internal struggle over the appropriate direction for monetary policy. Three policymakers voted against the move, the first time such a split has appeared since September 2019, with Governor Stephen Miran pushing for a larger half-point cut, while Kansas City President Jeffrey Schmid and Chicago’s Austan Goolsbee preferred to hold rates steady. The disagreement reflects the broader ideological divide within the Fed. Hawks remain focused on persistent inflation pressures, advocating for tighter policy, while doves argue that a cooling labour market warrants more support. Miran, who is set to leave the Fed in January, registered his third consecutive “no” vote, while Schmid dissented for th
Interest rates
RBA holds rates steady amid rising inflation
The Reserve Bank of Australia (RBA) has unanimously agreed to hold cash rates steady at 3.6%, citing caution as inflation rises. The decision follows an increase in inflation in October and an uptick in annual economic growth rates last quarter. The RBA last cut interest rates in August, with rates being lowered by 0.75% across 2025. “The recent data suggest the risks to inflation have tilted to the upside, but it will take a little longer to assess the persistence of inflationary pressures,” wrote the RBA Governance Board. “Private demand is recovering. Labour market conditions still appear a little tight but further modest easing is expected. The Board therefore judged that it was appropriate to remain cautious, updating its view of the outlook as the data evolve.” October’s increase in underlying inflation was likely “due to temporary factors and there is uncertainty about how much signal to take from the monthly CPI data", the Board wrote. “Nevertheless, the data do suggest some signs of a more broadly based pick-up in inflation, part of which may be persistent and will bear close monitoring.” The Board did not consider cutting rates this meeting, RBA Governor Michele Bullock said at a press conference, and it d
Interest rates
BOJ faces catch-22 as govt bond yields hit new highs
With borrowing costs rising rapidly and government bond yields surging to levels unseen in decades, the Bank of Japan (BOJ) is confronted with nudging interest rates higher - risking even steeper yields and more pressure on a fragile economy - or pausing, possibly even easing, which could fan inflation. Yields on Japanese government bonds have been climbing steadily, with the 10-year benchmark touching 1.917% on Thursday, the highest since 2007. Longer-dated bonds have followed suit: the 20-year hit 2.936%, a level last reached in 1999, while the 30-year rose to a record 3.436%, according to LSEG data. The BOJ scrapped its long-running yield curve control framework in March 2024, abandoning the cap that kept 10-year yields around 1%. While that shift coincided with the end of Japan’s negative interest rate era, inflation has now stayed above the bank’s 2% target for more than three and a half years, This is adding pressure on policymakers to tighten further as higher yields threaten to spiral. Analysts warn that a return to aggressive bond-buying or yield caps could weaken the yen again, pushing up the price of imports, a problem Japan is already dealing with. Meanwhile, rising yields inflate the government’s
Interest rates
Patient RBA says future rate changes depend on data
The Reserve Bank of Australia (RBA) believed it could continue to be patient about changing interest rates, with future decisions to be driven by economic data, according to the Minutes of the last RBA Monetary Policy Board meeting published on Tuesday. The RBA decided to leave the official cash rate unchanged at 3.60% at its November meeting because the September inflation increase had been larger than expected, the labour market was tight, and the effects of previous rate cuts were not apparent yet. The Board’s strategy to be guided by data and remain cautious could imply a more gradual easing in policy than had been assumed in the August forecasts if certain conditions materialised. “Given that, Members determined that they could afford to be patient while assessing what the incoming data reveal about their judgements on the extent of spare capacity, the outlook for the labour market and the degree of restrictiveness of monetary policy,” the Board said. The market pricing used to condition RBA forecasts implied no further cuts in the cash rate in 2025 and one cut of 25 basis points by late 2026, and more than half of market economists did expect rate cuts in 2025 or 2026, the Minutes said. Board Member observatio
Interest rates
Taking a look at global central bank trajectories
Central banks across major economies are taking markedly different routes through the final months of 2025 amid uneven progress in the fight against inflation. From the European Central Bank reaching the terminal point of its easing cycle to the Bank of Japan weighing its first hikes in years, let’s take a deeper look at central bank dynamics across the globe.United States – Fed Begins Easing, but Caution PrevailsThe Fed has started cutting rates after a long pause. In September 2025, it lowered the federal funds rate by 25bp to 4.00–4.25% and followed with another 25bp cut on 29 October to 3.75–4.00%. This brought rates 150bp below their peak in August. Policymakers’ forecasts (the “dot plot”) had signalled roughly two cuts by year-end, and indeed markets initially priced in a third cut by December. However, Chair Powell reiterated that further easing is data‑dependent, warning that a December cut is “not a foregone conclusion”. Inflation in the U.S. remains above target. The Fed’s preferred PCE inflation was about 2.7% year‑on‑year in August (core PCE 2.9%) – down from its 3–4% peaks but still modestly above 2%. This underlies the Fed’s caution: the October statement noted “inflation has moved up since earlier in

Interest rates
Fewer rate cuts possible in this cycle - Bullock
The Reserve Bank of Australia (RBA) may need to ease monetary policy less than previously because it had reduced inflation while growing employment, Governor Michelle Bullock said. She said the resilience of the labour market meant the central bank had started cutting official cash interest rates from a relatively strong position. “When combined with the fact that we hadn't raised rates particularly high, this could mean that less easing and monetary policy is needed in this episode compared to previous ones,” Bullock noted at the post-meeting press conference. “So the Board will remain cautious, driven by what the incoming data tell us about the outlook.” She was speaking after the RBA Monetary Policy Board’s unanimous decision to keep the official rate, which influences borrowing costs across the economy, on hold at 3.6% for the second time in three months. The forecast in the August Statement of Monetary Policy that underlying inflation would rise above 3% in the coming quarters before settling at 2.6% in 2027 was based on a technical assumption of one more rate cut in 2026. Asked about the risk inflation could “get away” and how confident she was that monetary policy was restrictive enough, Bullock said: “It'
Interest rates
Australia’s central bank keeps interest rates steady
The Reserve Bank of Australia (RBA) has kept the official cash interest rate unchanged at 3.60%. The announcement, which was consistent with market expectations, came at the end of the traditional two-day bi-monthly meeting of the RBA’s Monetary Policy Board. This was the second time in three months that the central bank had kept rates on hold, having cut them from 3.85% in August. The market had been factoring in a 25 basis point reduction before an unexpectedly high inflation figure last week. However, according to the ASX's RBA Rate Tracker, the odds for a 25 basis point cut tumbled to just 7% as of 3 Novermber, down from 62% a week earlier. In a statement following the unanimous decision, the Board said although financial conditions had eased since the beginning of the year, it would take some time to see the full effects of earlier cash rate reductions. “Given this, and the recent evidence of more persistent inflation, the Board judged that it was appropriate to remain cautious, updating its view of the outlook as the data evolve,” the central bank said in the statement. “The Board remains alert to the heightened level of uncertainty about the outlook in both directions.” The Board said although trimme
Interest rates
Fed cuts rates 25bp to 3yr low, ends balance sheet runoff
The United States Federal Reserve lowered interest rates on Wednesday (Thursday AEDT) to their lowest level in three years, marking its second rate cut in 2025 amid headwinds from the federal government shutdown and President Donald Trump’s tariffs. By a 10-2 vote, the Federal Open Market Committee (FOMC) reduced its benchmark overnight borrowing rate to a target range of 3.75%-4%. The move was widely anticipated by markets, following weeks of weaker economic data and mounting uncertainty. Two committee members dissented. Stephen Miran, appointed by Trump days before the September meeting, once again voted against the majority, arguing the rate cut should have been deeper. Jeffrey Schmid, president of the Kansas City Fed, voted instead to leave rates unchanged. The Fed also announced that it would halt the reduction of its balance sheet, known as quantitative tightening (QT), on 1 December. The program has reduced roughly US$2.3 trillion from the central bank’s holdings of Treasurys and mortgage-backed securities. Instead of reinvesting proceeds from maturing assets, the Fed had been allowing them to roll off its balance sheet each month. However, recent stress in short-term lending markets prompted policym
Interest rates
RBA holds rates at 3.6%; inflation, growth risks linger
The Reserve Bank of Australia (RBA) has left the cash rate unchanged at 3.6%, in line with market expectations, as policymakers weighed a mix of rising domestic demand, sticky inflation, and heightened global uncertainty. At its September meeting, the central bank said inflation had eased considerably but warned it may still surprise on the upside. "Both headline and trimmed mean inflation were within the 2–3 per cent range in the June quarter. Recent data, while partial and volatile, suggest that inflation in the September quarter may be higher than expected at the time of the August Statement on Monetary Policy," the minutes stated. The decision came after fresh consumer price figures showed headline inflation accelerating to 3% in August, its highest level since July 2024, driven by housing, food, and alcohol costs. Policymakers also pointed to stronger private demand as a key driver of economic momentum: "Data for the June quarter show that private demand is recovering a little more rapidly than expected, taking over from public demand as the driver of growth. In particular, private consumption is picking up as real household incomes rise and measures of financial conditions ease. "The housing market is strength