Interest Rates

Erdogan crackdown slams brakes on Turkish recovery

19 Mar 2025

The $1.5 trln economy has gained from more orthodox monetary policy in recent years, which boosted financial assets and has helped tame inflation. Now President Tayyip Erdogan’s arrest of a key political rival has hit the lira, and will unsettle ratesetters and foreign investors.

China’s only plan for Trump is plan for the worst

28 Feb 2025

The US president says he'll apply a new 10% tariff to its rival's exports next week as Beijing's annual policy meetings kick off. Chinese officials are due to set growth and stimulus targets. These will need to be flexible and vague to absorb rapidly escalating external shocks.

Cracks in India’s consumption story run deep

16 Jan 2025

Wages of its giant workforce are stagnating, dragging down growth in the $4 trln economy. Authorities can cut taxes or ease the flow of credit to stimulate spending. It will, though, cut the financial stability that underpins the emerging market’s moment.

US tariffs may lead ratesetters to fight wrong war

14 Jan 2025

As Donald Trump returns to the White House, his trade policies could push prices up. Fed Chair Jay Powell and Europe’s Christine Lagarde may be tempted to respond with tactics they think helped lower inflation towards 2% in the latest crisis. That could hurt their economies.

Politicians will hinder central banks’ easing plan

3 Jan 2025

Economies are growing and inflation is falling globally. It’s an ideal environment for central bankers to lower rates. Yet governments are loath to cut debt, which hit 93% of GDP in 2024. Without fiscal restraint, monetary policy’s path will be bumpy, as will financial markets.

Labour and labour market point to slower BoE cuts

18 Dec 2024

The Bank of England is set to leave rates on hold this week. The economy is weak but pay growth is strong, keeping inflation above 2%. The government’s plans will boost GDP and prices in 2025. Until unemployment rises, Governor Andrew Bailey cannot ease as fast as foreign peers.

Golden visas are a leaden answer to economic needs

10 Dec 2024

Hungary is the latest country to launch a residency-by-investment scheme. Such plans appeal to rich foreigners. But they add less than 0.5% to GDP, inflate property prices and irk locals. As geopolitical risks spur demand, governments will have to either charge more or nix them.

ECB’s rearview mirror ignores economic crash ahead

10 Dec 2024

The European Central Bank is set to cut rates by just 25 basis points this week because GDP is growing at 0.4% - the quickest since 2022. But inflation is subdued and the outlook for consumers, businesses and exports is weak. The euro zone’s grim future warrants stronger action.

India compounds new central bank boss’s challenges

10 Dec 2024

Sanjay Malhotra will have enough on his plate as RBI governor dealing with a slowing domestic economy amid rising global tensions. But the messy way in which New Delhi handled the transition from six-year incumbent Shaktikanta Das means Malhotra starts on the back foot.

Why central banks were both lucky and smart

3 Dec 2024

Policymakers in major economies have quelled the post-pandemic inflation surge without causing recessions. In this episode of The Big View podcast, BlackRock’s Alex Brazier argues big rate hikes in the US, Europe and the UK helped – but so did unusually strong labour markets.

India’s slowdown flashes an early-warning signal

2 Dec 2024

GDP growth slipped to 5.4% last quarter, the slowest pace in nearly two years, on weak manufacturing and spending. Perhaps it’s a blip. But the Adani fallout, Trump tariff threats and China stimulus could all deal blows to rosy assumptions about the world’s fifth-largest economy.

Trump trades will run into Trump reality

14 Nov 2024

The president-elect’s victory sparked wild euphoria in markets. Now comes the realization that tariffs and immigration crackdowns threaten major costs, including the return of inflation. In this Viewsroom podcast, Breakingviews columnists discuss the globe-spanning concerns.

China’s stimulus priorities are plain to see

14 Nov 2024

Readouts of Beijing’s economic meetings focus on fixing local government debt and reflating asset prices, both for equities and property. Expect ongoing policies to zero in on these areas. Those waiting for heavy spending and consumer handouts will be disappointed.

ECB will fail to get out ahead of US trade war

8 Nov 2024

Donald Trump’s return to the White House puts Europe in a bind. With the euro falling, slow growth and likely US tariffs, European Central Bank chief Christine Lagarde can help by slashing rates to 2.75% in December. But policymakers’ muddled priorities make that unlikely.

Fed’s victory lap runs into Trump-shaped detour

7 Nov 2024

The FOMC cut rates again, two days after the ex-president was voted back into office. His avowed higher tariffs and renewed tax cuts jeopardize the work that lowered inflation to 2%, alongside 4% unemployment. Threats to central bank independence also add to risks of stagflation.

UK fiscal splurge limits BoE’s rate-cutting space

5 Nov 2024

The Bank of England is likely to lower borrowing costs to 4.75% this week. Next year, though, government spending will give Britain’s economy a sugar rush of growth and inflation. That will prevent Governor Andrew Bailey from easing policy as fast as peers in Europe and the US.

Companies bear brunt of Britain’s fiscal trade-off

30 Oct 2024

New finance minister Rachel Reeves raised 40 bln pounds through higher levies, mostly on employers, to fund public services like health. She also changed debt rules to borrow more. It’s a bet that fiscal rectitude will help revive growth. But the ailing UK has few other options.

Value push will mostly survive Japan election mess

29 Oct 2024

A decade-long effort to boost shareholder returns can continue to gain traction despite the LDP's disaster at the polls. It helps that Japan Exchange took charge of the party's initiative for structural reform. For now, as politicians vie for power, a weak yen will buoy stocks.

Debt rule tweak can help UK avoid moron premium

25 Oct 2024

Two years ago, former Prime Minister Liz Truss’ unfunded tax cuts sent 10-year gilt yields surging to 4.5%. Now, new Chancellor Rachel Reeves can avoid a similar debacle with small changes to the fiscal rules in next week’s Budget. With yields at 4.2%, there is no room for error.

China pins stimulus on money merry-go-round

23 Oct 2024

Beijing plans to swap some of its $9 trln of local government debt into bonds with full, rather than implicit, state backing. The rejig will lower rates of interest, lengthen maturities and allow provinces to issue more debt to banks. That will juice spending for a while.