{"text":[[{"start":11.1,"text":"Investors expect the Federal Reserve to hold US interest rates steady when it meets on Wednesday, as policymakers continue to monitor the effect of the Iran war on the world’s biggest economy."}],[{"start":23,"text":"The US central bank will again emphasise its dual mandate of pursuing maximum employment and low inflation and chair Jay Powell is expected to “highlight the resilience of the economy as a point in favour of keeping rates on hold”, Thomas Simons at Jefferies wrote to clients."}],[{"start":39.7,"text":"The market’s view of Fed policy has see-sawed during the Iran war. Before the US-Israeli attack, traders on futures markets were pricing two or three quarter-point rate cuts this year. As oil prices surged, they began to see the Fed as more likely to raise rates than to cut. They have since U-turned again and are now pricing a roughly 50 per cent chance that it will make one cut by the middle of next year."}],[{"start":63.6,"text":"Wednesday’s meeting may be Powell’s last as chair, as Kevin Warsh, President Donald Trump’s choice as Powell’s successor, is in the middle of a confirmation process."}],[{"start":74.35,"text":"Democrats have raised concerns that Warsh will struggle to maintain the Fed’s independence. Jefferies expects that he will be confirmed and will not make policy changes until later in the year, possibly including a September rate cut and changes to the Fed’s balance sheet policy. Jill R Shah"}],[{"start":89.64999999999999,"text":"Are ECB rate-setters doves or hawks?"}],[{"start":93.55,"text":"When the European Central Bank meets in Frankfurt on Thursday, policymakers are all but certain to leave interest rates unchanged for the seventh meeting in a row."}],[{"start":102.55,"text":"Several members of its governing council including president Christine Lagarde have recently stressed that it is too early to assess the effect of surging energy prices on inflation and growth. According to economists at BNP Paribas, the ECB had “clearly dialled down” the “degree of hawkishness” in its communications since its March meeting. "}],[{"start":123.75,"text":"However, there is still a consensus that rate rises “are not a question of ‘if’, but of ‘when’”, as Christian Lenk, market strategist at DZ Bank, wrote to clients, while stressing that there were “still unanswered questions” on timing. “The decision on this is likely to be made not so much in Frankfurt as in Washington and Tehran,” he added."}],[{"start":144.15,"text":"Hours ahead of Thursday’s decision, Eurostat will publish a flurry of data including its first estimates of inflation in April. Economists polled by Reuters expect it to have risen to an annual rate of 2.9 per cent — the highest since December 2023 and way above the ECB’s 2 per cent medium-term target."}],[{"start":163.65,"text":"GDP data for the first quarter, also due on Thursday, will capture just one month of the Iran war. Economists expect relatively decent growth of 0.2 per cent from the previous quarter. However, recent survey data suggests that, looking forward, the Eurozone is flirting with stagflation."}],[{"start":182.5,"text":"Economists at Nomura warned that this creates a “difficult balancing act” for the ECB, as tighter monetary policy may rein in inflation but could slow the region’s economy even more. Olaf Storbeck"}],[{"start":195.6,"text":"Will BoE scenarios include an interest rate roadmap?"}],[{"start":199.45,"text":"Investors will closely monitor how the Bank of England incorporates the Iran war into its latest macroeconomic projections, due to be published alongside its monetary policy decision on Thursday."}],[{"start":212.04999999999998,"text":"Economists and traders in swaps markets have put a high probability on the central bank holding interest rates at 3.75 per cent, with a small chance seen for a rate increase."}],[{"start":222.29999999999998,"text":"The BoE’s central macroeconomic scenario is likely to rely on market data such as energy futures, allowing the Monetary Policy Committee to avoid taking its own view on how the conflict will evolve, some economists say. It will also lay out more benign and more adverse scenarios."}],[{"start":240.35,"text":"Individual policymakers will give their views of the balance of risk between elevated price pressures and weakening demand, offering insight into how they could react to each of the scenarios. Investors may then be able to get a sense of how many of the MPC’s nine members would back a summer rate rise if energy prices stay high or keep rising."}],[{"start":261.7,"text":"The data has been mixed. The latest S&P Global survey of purchasing managers points to strong price pressures, while business activity has been more resilient than expected."}],[{"start":273.2,"text":"Dani Stoilova, an economist at BNP Paribas, expects two policymakers — Huw Pill and Catherine Mann — to vote for a quarter-point rise on Thursday. Edward Allenby of Oxford Economics says Megan Greene could join those favouring pre-emptive tightening to guard against rising inflation."}],[{"start":292.45,"text":"Governor Andrew Bailey said this month that he would not “rush into any judgments”, while Sarah Breeden and Alan Taylor have both signalled a preference for keeping policy on hold."}],[{"start":303.59999999999997,"text":"“Overall, we expect the message from the committee to be that, while the door remains open to rate hikes, if necessary, the Monetary Policy Committee is not yet in a rush to deliver them,” said Stoilova. Valentina Romei"}],[{"start":323.7,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1777202125_2260.mp3"}