CENTRAL BANK WATCH

CURRENT SITUATION

NEXT MEETING

EXPECTATION

UNITED STATES:

FOMC

The Fed funds rate is at 0%-0.25%. The Fed initiated a new round of MBS asset purchases and extended its rate guidance on September 13, 2012.

Mar.20 May1

We expect the Fed to keep the funds rate near 0% through mid-2016, and to continue asset purchases through mid-2015.

JAPAN: BoJ Monetary Policy Board

The overnight call rate is at 0%-0.1%. The BoJ enacted open-ended asset purchases through 2014 on January 22, 2013.

Mar.7 Apr.4

We expect the BoJ to keep the policy rate near 0% through 2016, and to continue with APP at least until the end of 2014.

EURO AREA: ECB Governing Council

The refi/deposit rates are at 0.75%/0.00%. The ECB announced the OMT programme for conditional purchases of Euro area sovereign bonds in September 2012.

Mar.7 Apr.4

We expect the ECB to keep policy rates on hold at least through mid-2015. Future policy depends on the OMT programme’s success in repairing the monetary policy transmission mechanism.

UK: BoE Monetary Policy Committee

The BoE policy rate is currently at 0.5%. An extra £50bn of asset purchases was announced in July 2012, bringing the current total to £375bn.

Mar.7 Apr.4

We expect the BoE to keep the policy rate unchanged at least through mid-2015.