Three central bank stories dominated published research this week, all against a backdrop of sticky US inflation and slowing growth.
On the Fed: analysts broadly note the FOMC held rates for a fifth straight meeting, with three hawkish dissents and a press conference from Chair Warsh that researchers widely criticised for muddling the inflation message. The published reaction: a sharp sell-off at the long end of the curve (30-year yields hit a 19-year high above 5.2%) and a weaker dollar. Market-implied odds of a September hike now sit around 60–67%, which several research notes flag as "live."
On Japan: commentary highlights that the Ministry of Finance intervened aggressively to push USD/JPY from roughly 163 to 158, while the BOJ delivered a hawkish hold at 1.00% and flagged AI demand and FX as new inflation risks. One camp warns intervention firepower is nearly exhausted; a contrarian thread expects more action soon.
On the BOE: researchers characterise the 6-3 vote as a dovish hold, with Governor Bailey pushing back on near-term tightening. Views diverge on whether November or December is the more likely next move.