Central Banks
Investors Start Gaming Out Exit Plan for Global Rate Divergence
- Fed, BOJ and BOE decisions span all possible policy outcomes
- Diverging routes present opportunities, challenge outlook
The Bank of Japan kicked off the action on Wednesday by unexpectedly hiking as Governor Kazuo Ueda pressed ahead with his push to lift his benchmark clearly away from zero.
Photographer: Soichiro Koriyama/BloombergThis article is for subscribers only.
Three of the world’s largest central banks moved interest rates in different directions this week as a long-awaited, but potentially short-lived, divergence in monetary policies deepens.
The Bank of Japan kicked off the action on Wednesday by unexpectedly hiking as Governor Kazuo Ueda pressed ahead with his push to lift his benchmark clearly away from zero. Then came the Federal Reserve’s decision to stay on hold yet signal of a cut in September, followed on Thursday by the Bank of England’s first reduction since the start of the pandemic.