Charting the Global Economy: Key Central Banks Hold on Rates

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Sticker shock has yet to register for the residents of America’s affluent suburbs and downtown condos, the target audience for luxury credit cards from JPMorgan Chase and American Express. The card companies are tapping into a new US economic reality: While the vast majority worries about money and is cutting back, the rich continue to shrug off recession concerns and spend freely.

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Europe

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In a decision that left rates on course for a potential quarter-point cut in August, six of the BOE’s nine Monetary Policy Committee members voted to leave rates unchanged while three preferred an immediate quarter-point reduction. Economists had expected a 7-2 split.

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Investor confidence in Germany’s economy improved more than anticipated as a forthcoming surge in public spending outweighs fears over looming US tariffs.

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UK home prices fell in April by most since 2021, government data show, as a tax increase drove some buyers out of the market. 

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Asia

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The BOJ kept its benchmark policy rate at 0.5% and outlined a plan to cut monthly bond purchases from the next fiscal year to quarterly reductions of ¥200 billion ($1.34 billion) from the current ¥400 billion. The board’s decision follows recent sharp moves in JGBs that rippled across global debt markets. 

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China is testing the limits of what its consumer stimulus can accomplish by subsidizing purchases of select goods, fueling a shopping spree that boosted retail sales growth to the strongest in more than a year but threatening to overwhelm authorities even in the richest regions.

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Japan’s exports fell for the first time in eight months as the US tariff campaign weighed on global trade, raising the risk of a technical recession after the economy contracted at the start of the year. The value of exports dropped 1.7% in May from a year earlier even as the export volume climbed 1.8%, suggesting exporters may be absorbing the tariff shock by cutting prices.

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Emerging Markets

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The United Nations nuclear watchdog said the location of Iran’s near-bomb-grade stockpile of enriched uranium cannot currently be verified, as Israel’s ongoing military assault is preventing inspectors from doing their work. Iran’s 409 kilograms (902 pounds) of highly-enriched uranium — enough to produce 10 nuclear warheads — should theoretically be secured under an International Atomic Energy Agency seal at an underground facility at Isfahan.

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With the Trump administration’s aggressive clampdown roiling migration patterns across the hemisphere, the top destination for outbound Cubans is no longer along Florida’s shores. Instead of Miami they’re flocking to Curitiba, in Brazil’s farm country.

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—With assistance from Philip Aldrick, Irina Anghel, James Attwood, Claire Ballentine, Ruth Carson, Toru Fujioka, Annmarie Hordern, Sumio Ito, Masaki Kondo, Meg Lopes, Jacob Lorinc, Yoshiaki Nohara, Amara Omeokwe, Tom Rees, Andrew Rosati, Michael Sasso, Zoe Schneeweiss, Mark Schroers, Paige Smith, Jonathan Tirone, Fran Wang, Josh Xiao and Yvonne Yue Li.

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