Monetary Policy

ECB fails to get the memo on Europe’s emergency

6 Mar 2025

The European Central Bank cut its key rate to 2.5%, but now looks coy about future monetary loosening. Its fears of the inflationary impact of a tariff war and higher defence spending look overblown. And geopolitical uncertainty calls for firm guidance, not excessive caution.

Trump will splinter world’s ‘China plus one’ plans

6 Mar 2025

The US president is moving aggressively against China’s exports, the economic pillar of its strategic adversary, by dangling secondary sanctions on third countries. It heralds a push towards a cleaner segregation of US-centric supply chains from those for the rest of the world.

Deficit will push Hong Kong closer to the mainland

25 Feb 2025

The Asian hub's fiscal reserve has dropped 40% since 2020 due to shrinking revenue from land and property sales. The city is ramping up borrowing in response. China is a natural buyer of the debt, allowing Beijing to diversify its reserves and protect its gateway to the world.

Trump’s economic trench warfare needs an off-ramp

3 Feb 2025

The US president is betting his economy can weather a tariffs tit-for-tat better than Canada and Mexico. But it'll raise inflation for Americans, too, and it's hard to see how he wins. Even if the battle is short, Washington's poor treatment of allies will have lasting effects.

India’s tax cuts grasp at a fleeting growth fix

3 Feb 2025

By hiking the income-tax exemption threshold, Narendra Modi’s government hopes the middle class will go out and spend. But that leaves the state relying on 1% of the working age population to help pay its bills. It throws the urgency to tackle stagnant wages into sharp relief.

Bond bulls put Beijing on the horns of a dilemma

28 Jan 2025

The relentless plunge in yields allows China to issue debt inexpensively to stimulate its $18 trln economy, but it also reinforces expectations of slow GDP growth, a weak yuan and the People’s Republic as a low-interest-rate country. Managing that tension is getting riskier.

Japan rates’ fate rests on Trump-Ishiba bromance

24 Jan 2025

The country's rising inflation and wage growth make the case for more hikes, but US tariffs could change the argument. The prime minister’s first trip to Washington will require ample charm and concrete offers on investment and defence policy to mollify the levy-prone president.

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.

Country Garden’s debt fix is a bet against Beijing

10 Jan 2025

The property developer, once China’s largest by sales, is offering a 90% haircut as an option to restructure $16 bln of offshore bonds. Acceptance would imply creditors have given up hope that the government is about to put more substantive policies in place to boost home prices.

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.

Warnings and worries haunt best-read views of 2024

31 Dec 2024

This year our readers fretted about imploding stocks, regulatory shocks and Washington’s new status quo, even as the S&P 500 Index hit record highs. Incoming President Donald Trump, Tesla boss Elon Musk, Russia’s Vladimir Putin, and Britain’s royal family all added to the drama.

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.

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.

China’s wealth pledge will face tough sceptics

10 Dec 2024

In a key meeting, Beijing identified stabilising stock and property prices as a top task in 2025. It recognises that people will spend more if they feel rich. This implies a policy bottom for both markets. Yet observers are forecasting a huge range of outcomes in the coming year.

ECB approach to French storm can be a Gallic shrug

4 Dec 2024

The risk premium on France’s debt is at its highest since the 2012 euro zone crisis. Yet even if it worsens, the European Central Bank is unlikely to deploy knee-jerk rate cuts or bond-buying. It also has the tools to address spillover effects on other member states.

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.

Currency drop worsens Moscow’s stagflation fears

29 Nov 2024

The Russian central bank may have to hike interest rates from an already high 21% after this week’s rouble meltdown, caused by US sanctions on a key bank. But its real problem is that inflation keeps rising as the economy is slowing, deepening fears of a crash-landing.

Market’s Trump trades at risk from bond vigilantes

20 Nov 2024

US consumer prices have risen 21% since 2020, helping President-elect Donald Trump win the White House. His policies, though, may stoke inflation. Stocks, bitcoin and the dollar like a hot economy. But a rising deficit could upset debt investors and hit the current market stars.

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.