POLAND: MPC's Janczyk Sees Room For 50-100bp Cuts This Year
Apr-14 07:10
- Several presidential candidates sparred in two separate hastily organised debates held in the town of Konskie on Friday night, but only one of them featured both candidates best positioned to make it to the run-off. A United Surveys/WP.pl poll showed that in the aftermath of the debate, Rafal Trzaskowski's support rate dropped markedly (by almost 5pp) but he maintained comfortable lead over his main rival Karol Nawrocki (up by over 5pp). Nawrocki may have benefitted from a decline in support for Slawomir Mentzen, who skipped both debates amid other campaign engagements. The first round of the election will be held on May 18 and if none of the candidates garners 50%+1 vote, two best performers will advance to the second round.
- MPC's Wieslaw Janczyk told PAP Biznes that there is a big chance of rate cuts at the coming monetary policy meetings but bringing the reference rate (currently at 5.75%) to 3.50% in 2026 would be difficult to achieve. For clarity, this was a possible terminal rate mentioned by Governor Adam Glapinski at his latest press conference. According to Janczyk, rate could fall by 50-100bp by the end of 2025.
- Citing the unpublished financial statement adopted by the MPC, Business Insider reported that the NBP's financial loss in 2024 was twice as large as expected and reached around PLN13.4bn. This will have no impact on the budget, which had already assumed that there would be no transfers from the central bank.
- Finance Minister Andrzej Domanski admitted that global trade tensions represented a 'small downside' risk to Poland's growth outlook. The government currently assumes that the economy will expand by 3.9% Y/Y this year.
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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
