The Federal Reserve on Wednesday voted to hold its key interest rate steady but not without opposition from three officials who have expressed concern over inflation and wanted to hike.

Despite increasing support among some officials for a rate increase, the Federal Open Market Committee voted 9-3 to leave the federal funds rate in a range between 3.5% and 3.75%.

All of the “no” votes came from regional presidents – Beth Hammack of Cleveland, Neel Kashkari of Minneapolis and Lorie Logan of Dallas – who had been the most explicit about the need for higher rates to address inflation that has been above the Fed’s 2% target for more than five years.

(Continue Reading – CNBC)

Few expect the Bank of England to spring a surprise on Thursday, with policymakers widely forecast to leave the Bank Rate unchanged at 3.75%. Instead, attention will centre on the Monetary Policy Report, the voting split and whether officials adopt a more hawkish tone in response to renewed energy-driven inflation risks.

The decision is due at midday (London time) on Thursday. The MPC is expected to vote 7-2 in favour of a hold. The committee's two consistent hawks, chief economist Huw Pill and Megan Greene, are expected to again vote for tighter policy, while some analysts believe Catherine Mann could join them.

This meeting will also include the BoE's annual review of quantitative tightening. Barclays expects the Bank to conclude that QT has increased gilt yields by around 15-25 basis points.

(Continue Reading – LiveSquawk)

The Bank of Japan is expected to keep rates unchanged on 31 July after last month’s 25bp hike to 1.00%. While some see scope for a faster tightening cycle and an October hike, we doubt any modest hawkish shift will materially boost the yen or alter the USD/JPY outlook

When raising the policy rate to 1.00% last month, the BoJ retained its tightening bias and concluded that a further removal of monetary accommodation would be required. As always, the timing of such an adjustment would depend on developments in economic activity, prices, and financial conditions.

Since that meeting in mid-June, the BoJ has seen strong retail sales figures and, perhaps most importantly, a buoyant Tankan business survey for the second quarter. Here, business optimism has returned to levels last seen in 2018 and likely provides comfort to the BoJ’s view that the virtuous cycle between company profits, higher wages, consumption and prices is ongoing.

(Continue Reading – ING)

Whether by carrot or stick — and there’s still no definitive reporting on which — the animosity between Iran and the UAE has been easing. The Emirates bore the vast majority of Tehran’s attacks in the first weeks of the war, but since April 29 that has shrunk to 17% of Iranian strikes. The shift has coincided with an effort to cool tensions, with the UAE seeking to move “from hostility to détente with Tehran,” the Financial Times reported.

(Continue Reading – Semafor)