Americans, Czechs, and Britons Lower Interest Rates, Polish National Bank Still Without Clear Declarations

The Federal Reserve has met market expectations by lowering interest rates by 0.25%. Similar decisions were made by the Czechs and Brits. In each case, these actions were anticipated by the markets. The press conference of the Polish National Bank president did not provide clear guidelines.

The FED doesn’t surprise

Across the ocean, the Federal Open Market Committee decided to lower interest rates by 0.25%, in line with market expectations, which explains the mild response to this news. However, it is worth noting that speculation continues about another rate cut in December. This is due to doubts about whether the change in president could lead – as many analysts fear – to greater inflationary pressure. If the rate-cut cycle were to slow, it could strengthen the dollar.

Conference of the NBP President

Yesterday saw the conference of the NBP President. The entire transmission lasted over an hour. It is unfortunate that the substantive part took up so little time, especially since we will only learn the details of the November inflation projection today, which the Monetary Policy Council already knows. Among the numerous statements defending the NBP’s policy and some unusual comparisons using creative statistics, sadly, there was no clear future plan. This is significant, as one of the largest banks this week forecasted the possibility of a rate cut as early as March. However, looking at the recent levels of the six-month WIBOR rate, this scenario seems unlikely. It appears that we will have to deal with expensive money – high loan installments – for at least the next half-year.

Decisions of other central banks

Yesterday the Czech central bank lowered the main interest rate from 4.25% to 4.00%, which was expected. It is worth noting that the Czechs started the rate cut cycle later than Poland, but did not halt it, unlike us. As a result, within a year, interest rates at our southern neighbour dropped by three full percentage points – from 7% to 4%. Poland, on the other hand, halted the rate-cut cycle and has maintained the main rate at 5.75% for the past year. Yesterday, we also had a forecasted interest rate cut from 5% to 4.75%, which did not trigger significant reactions on the markets, as decisions were expected.

Today’s macroeconomic data calendar should pay attention to:

• 14:00 – Romania – interest rate decision,
• 14:30 – Canada – labour market situation,
• 16:00 – USA – University of Michigan Report.

Maciej Przygórzewski – chief analyst at InternetowyKantor.pl