Central bank news covering ECB, Bank of England, Bank of Japan, interest rate decisions, and global monetary policy developments.
This commentary argues that central banks now hold more gold than US Treasuries for the first time since 1996, signaling a decline in trust in the US dollar and Washington's fiscal credibility. It contends that this shift, driven by gold price increases and central bank buying, has significant implications for US borrowing costs and the dollar's global status.
ECB Executive Board member Isabel Schnabel stated the central bank can no longer look through the inflationary impact of the Iran war, as price pressures spread beyond energy and risk unanchoring expectations. She noted damage to infrastructure and supply chains has altered price dynamics durably, and policymakers may need to act even if the conflict ends immediately.
Mohamed El-Erian argues that the decades-old 'policy put'—the expectation that central banks and governments will rescue markets during downturns—is disappearing due to high inflation, elevated interest rates, and soaring debt. He warns this shift has implications for both financial markets and the real economy, as policymakers lose capacity to respond to crises.
This commentary argues that the Reserve Bank of India is likely to keep its policy rate unchanged due to supply-driven inflationary pressures from the US-Iran war and El Niño, which are less responsive to rate hikes. It presents contrasting views from economists, with some favoring a pause to avoid harming growth and others advocating a hike to anchor inflation expectations.
Bank of France Governor Villeroy de Galhau announced the central bank will lower its 2026 growth forecasts later this month due to a disappointing first quarter and Middle East tensions. The bank will publish multiple scenarios due to high uncertainty, though most scenarios remain positive.