US Fed, BoJ and BoE hold rates as they gauge impacts of trade tariffs

Central bankers in the US, Japan and UK held the line on interest rates this past week, opting for a patient policy approach in order to gauge the economic and inflationary impacts of tariffs.

Federal Reserve chair Jerome Powell downplayed mounting growth concerns and the price hits that could be on the way from President Donald Trump’s aggressive trade policy. The Bank of Japan added a reference to trade policies to its list of risks to the outlook, its statement showed Wednesday.

Meantime, Bank of England governor Andrew Bailey urged his rate-setting colleagues to tread carefully in the face of a turbulent global backdrop.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:

World

Outside of the major central banks, the Riksbank in Sweden kept its benchmark rate unchanged at a two-year low and reiterated it’s finished with the easing cycle. Taiwan kept rates at the highest level since 2008, while South Africa, Indonesia, Angola, Armenia, Russia and Paraguay also stood pat. Chinese banks held their lending rates steady for a fifth month. Switzerland, Iceland and Morocco lowered rates.

Trump’s trade policies have abruptly set the world onto a path of slower growth and higher inflation that could worsen notably if tensions escalate.

US

Fed officials held their benchmark interest rate steady for a second straight meeting, caught between mounting concerns that the economy is slowing and inflation could remain stubbornly high. Chair Jerome Powell downplayed those risks and even revived a once-abandoned term to say the inflationary impact of tariffs is likely to be transitory.

Europe

In the most hawkish decision in six months, two BOE rate-setters that have supported lower borrowing costs at the previous three meetings – deputy governor Dave Ramsden and Alan Taylor – voted for no change in policy, as did Catherine Mann who shocked markets by backing a bumper half-point reduction in February.

Asia

Chinese consumption, investment and industrial production exceeded estimates to start the year, pointing to signs of resilience for an economy still in need of more stimulus as Trump’s tariffs threaten growth.

India is about to join the worldwide wave of steel protectionism, outlining plans for sweeping trade tariffs just a week after Trump slapped duties on all US imports. The global steel market is facing upheaval as multiple nations put up defences to fight a flood of metal, particularly from billion-ton producer China.