POLAND: Analyst Views On March CPI Inflation
Apr-15 16:32
- In Goldman Sachs’ view, the string of sanguine inflation prints in the first three months of 2025 supports the case for the NBP to recommence easing in Q2, most likely in May. Ahead of the May meeting, the key developments to watch will be the flash CPI reading for April (which GS expects to show a decline in headline inflation from 4.9% y/y to 4.2% y/y), the April ECB decision, and external risk developments.
- ING notes that the final March CPI data indicate that headline inflation ceased growing in the first quarter, and core inflation has started to moderate. The outlook for the rest of the year is improving, but US tariffs are posing threats to global growth and downside risks to price growth in Europe. ING sees monetary easing in May, with a 50bp rate cut on the table.
- Santander expects CPI growth to slow to 4.2-4.3% y/y in April, influenced by the base effect of the reintroduction of VAT on food in April 2024. Another significant fall in inflation is very likely in July, due to a second negative base effect. By year-end, inflation should be close to 3.5% y/y, in their view. Such a trajectory supports an interest rate cut, probably as early as May. Santander expects a 50bp rate cut in May, followed by another 25bp in July, and sees room for another 100bp of cuts in 2026.
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FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
Mar-14 21:28
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Mar-14 21:25
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
Mar-14 21:17
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
