The US Federal Reserve (Fed), the Bank of England (BoE) and the Swiss National Bank (SNB) will be the next major banks to announce their decisions on interest rates in the next two days.

Earlier today, the Bank of Japan (BoJ) kept borrowing costs on hold, in line with market expectations. The post meeting statement released by Japan’s central bank said that “concerning risks to the outlook, there remain high uncertainties surrounding Japan's economy and prices including the evolving situation regarding trade and other policies in each jurisdiction.”
 

Fed Interest Rate Decision

The Fed’s governing council will announce its decision on interest rates later in the evening. Market analysts suggest that the Federal Open Market Committee won’t adjust borrowing costs this time. The CME FedWatch Tool appears to support this forecast, as on March 19th, it indicated a 1% probability of the Fed lowering interest rates.

Deutsche Bank’s economists noted that the Fed could find itself between a rock and a hard place. In their report, they said: “Either the economy remains resilient and high inflation keeps the Fed mostly on hold, or the slashing of government employment combined with a trade uncertainty-induced freezing in private-sector hiring leads to a sharp deterioration in the labor market that necessitates a steeper path of cuts. Defining which path is correct is not easy."
 

BoE Interest Rate Decision

The BoE will follow suit on Thursday with its own interest rate decision. Some market analysts suggest that the central bank’s Monetary Policy Committee (MPC) is not going to alter borrowing costs at this point. It should be noted that last month, the BoE’s policymakers cut interest rates by 25 basis points, but wage growth and inflation remain in higher than targeted levels.

Analysts at ING said that the BoE could move forward with a rate cut in May as inflation and salary growth act as headwinds. In their report, published on March 17th, the Dutch bank’s economists noted: “For now, though, there’s little that’s happened since the February meeting that will have caused officials to shift their position. A rate cut is highly unlikely this week, given the Bank’s well-established pattern of cutting rates once per quarter. Our base case is that the Bank continues on its current course of gradual rate cuts, with moves in May, August and November. We don’t rule out a faster pace though that would require more obvious and abrupt signs of weakening in the jobs market."
 

Swiss National Bank Interest Rate Decision

The SNB’s governing board will decide on interest rates on Thursday morning. According to a poll by Reuters, market analysts expect the SNB to reduce borrowing costs by 25 basis points.

Swiss CPI inflation is the lowest among the G10 countries, but the Swiss franc dropped to a 6-month low against the euro last week. Six out of ten economists polled by Reuters forecast that the interest rate level could remain unchanged by year’s end.
 

Canadian CPI Rises, BoC Likely To Pause Rate Cuts

Inflation in Canada, rose to 2.6% on a yearly basis in February from 1.9% in January, according to a report by Statistics Canada. The figure came in above the market expectation of 2.1%.

Last week, the Bank of Canada Governor Tiff Macklem had said that trade wars could influence the product price levels. Commenting on inflation figures, economists at Desjardins noted that “given the tariff-related rise in inflation expectations and the recent momentum in actual price growth, it now seems likely that the Bank of Canada will pause its rate cutting cycle in April, at least temporarily.”

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