- The Fed maintained its policy rate at 5.25-5.50% range, signalling that the FFR may not come any sooner, given the returning inflationary pressure and the now-longer monetary policy transmission in the US.
- The Fed’s decision to delay its rate cut campaign may widen the monetary policy differential between the Fed and other central banks, as weaker growth momentum elsewhere may encourage other central banks to go ahead with their rate cut plan.
- The tapered UST run-off may help other bond markets maintain their rate differentials, lowering the risk of uncontrolled capital outflows that may arise in the event of spiking UST yields.
