Monetary Policy Day: Central Banks Set to Move

Historic Rate Reduction Anticipated

Today marks a significant moment in global monetary policy, with both the Bank of England and Federal Reserve expected to implement interest rate cuts aimed at managing inflation and supporting economic growth.

Bank of England’s Strategic Decision

Rate Cut Details

• Current base rate: 5%
• Expected reduction: 4.75%
• First rate cut since 1st August
• Driven by inflation falling below 2% target

US Federal Reserve’s Monetary Approach

Trump’s Election Impact on Rate Cuts

Following Trump’s re-election, market expectations have shifted dramatically:

• Anticipated single rate cut in 2025
• Potential slowdown in monetary easing
• Focus on import tariffs and tax reductions

Currency Market Movements

Sterling Performance

• GBPEUR recovering losses from recent UK budget
• Currency pairs showing increased volatility
• Market uncertainty driving trading dynamics

Dollar and Euro Reactions

• US dollar strengthening post-election
• Euro experiencing significant selloff
• Potential 10% global import tariff causing market concern

Global Trade Implications

US-Eurozone Relationship

• United States remains Eurozone’s largest trading partner
• Trump’s proposed tariffs creating market uncertainty
• Potential long-term economic strategy shifts

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