- BI and the Fed opted to leave its policy rates unchanged in the March 2025 meeting, highlighting both central banks’ policy independence despite recent short-term shocks.
- The growing stagflation concern compels the Fed to play down the market’s dovish expectations. Meanwhile, its slowing economy may compel the US government to reopen its fiscal spigot, possibly keeping the UST yields elevated.
- While the loose macroprudential policy may allow BI to maintain its dovish bias, the still-unfavourable global condition may continue to limit its policy options.
