Overview
- The Bank of Japan raised its policy rate to 1.00% on Tuesday and warned that rising wholesale costs from the Iran war could push underlying inflation above its 2% target.
- Federal Reserve Chair Kevin Warsh presided over a unanimous hold at 3.50%–3.75% on Wednesday, removed forward guidance and set up internal review committees to signal a firmer policy stance without committing to a path for rates.
- The Bank of England kept its main rate at 3.75% after a 7-2 vote, saying weak domestic growth makes pre-emptive hikes inappropriate and that tolerating above-target inflation for a time may be needed.
- Japan has spent an estimated ¥11.7 trillion in April–May to defend the yen but the currency remains near multi-decade lows, showing the limits of intervention as a stronger dollar and higher foreign yields continue to pressure the yen.
- Russia cut its key rate to 14.25% on Friday, citing slowing inflation and fuel-production risks, and markets have priced in higher U.S. policy risk which has strengthened the dollar and weighed on gold and cryptocurrencies.