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(Bloomberg) — Monetary policymakers from the US and the UK to Japan left interest rates unchanged this week as they assessed renewed inflation risks from higher energy costs and war in the Middle East.
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The Federal Reserve kept borrowing costs unchanged, but three officials voted for higher rates. The Bank of Japan and Bank of England also held rates steady, but like the US, several BOE policymakers also pushed for tighter policy.
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Elsewhere, higher costs complicated the outlook. Inflation accelerated in Germany and in France. Japan lowered its economic growth forecast and Singapore expanded support for households and businesses facing higher costs from the prolonged Middle East conflict.
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Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:
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World
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In addition to decisions by central bankers in the US, UK and Japan, Pakistan, Kyrgyzstan, Chile, Georgia, Uzbekistan, and Mozambique kept rates unchanged. Ukraine raised interest rates, while Singapore tightened monetary policy through the exchange rate.
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US
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US economic growth moderated in the second quarter, though a pickup in consumer spending and solid business investment signaled underlying strength. Consumer spending, which comprises about two-thirds of economic activity, rose at a stronger-than-expected 3.2% rate. Business investment continued to boom amid a rush to invest in artificial intelligence.
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Federal Reserve Chairman Kevin Warsh insisted policymakers’ decision to leave interest rates unchanged wasn’t a sign of inertia at the central bank, which he reiterated is committed to tackling inflation. The Federal Open Market Committee voted 9-3 to hold the benchmark federal funds rate in a range of 3.5% to 3.75%.
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US consumer confidence fell in July as Americans’ views about current business conditions and the labor market deteriorated. An indicator of present conditions dropped to the lowest since 2021, while the Conference Board’s measure of expectations for the next six months was unchanged.
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Europe
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German inflation accelerated to the highest level in three months after temporary fuel-price relief expired and renewed fighting in the Middle East bolstered oil. Consumer prices rose an annual 2.8% in July, the statistics office said.
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The Bank of England kept interest rates steady at 3.75% on Thursday, with Governor Andrew Bailey insisting his committee is not getting closer to a hike despite three members voting for tighter policy.
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French inflation unexpectedly quickened this month, supporting the case for another European Central Bank interest-rate increase. Consumer-price growth in the euro area’s second-largest economy jumped to 2.4% in July, the statistics agency Insee said.
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Asia
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China’s top officials struck a more supportive tone on the economy but stopped short of announcing fresh stimulus, holding back from aggressive measures despite an abrupt slowdown in growth. The measured approach taken by China’s leadership disappointed investors who anticipated a more forceful response.
English (US)