Dow Jones – TOKYO 5/12/2026

The U.S. and Japan have reaffirmed their commitment to
working closely together to monitor the currency market, Japan’s finance
minister said after meeting with Treasury Secretary Scott Bessent.

“We discussed financial market movements, including foreign exchange rates, in
light of the situation in the Middle East. Regarding recent currency moves, we
confirmed that Japan and the U.S. have been able to coordinate very well,”
Finance Minister Satsuki Katayama said at a news conference.

Bloomberg 5/12/2026

The Bank of Japan signaled the possibility
of a hike to its benchmark rate next month with a summary of
views from last month’s board meeting that conveyed concerns
over upside inflation risks stemming from the conflict in the
Middle East.
“It is quite possible that the bank will raise the policy
interest rate from the next monetary policy meeting onward, even
if the future course of the situation in the Middle East remains
unclear,” one board member said, according to a summary of
opinions from the April meeting released Tuesday.

Bloomberg 5/7/26

President Trump says he is giving the EU until July 4 to “deliver their side of the Deal and, as per Agreement, cut their Tariffs to ZERO” otherwise US “tariffs would immediately jump to much higher levels.”

Wall Street Journal — WASHINGTON — 4/29/26

Federal Reserve officials extended an interest-rate pause on Wednesday that revealed bigger divisions over whether to hint that further interest rate cuts are possible, marking a contentious conclusion to Jerome Powell’s eight-year chairmanship.

Officials held their benchmark federal-funds rate steady in a range of 3.5% to 3.75% and, in their policy statement, made no changes to language adopted last fall that signaled the next move in rates was more likely to be down than up.

Wall Street Journal 4/29/26

Wall Street traders are betting that there is a small chance that the Federal Reserve will raise interest rates this year, after central bank officials sent some hawkish signals on Wednesday.

Interest-rate futures showed Wednesday afternoon that traders see a 11% chance that the Fed will raise rates this year, according to CME Group data, up from 5% earlier in the day and zero percent on Tuesday. The chance of a rate cut was hovering around 2%.

The Fed on Wednesday maintained language in its policy statement suggesting that an interest-rate cut is more likely than a rate hike in the months ahead. However, three Fed presidents formally objected to that language, and Fed chair Jerome Powell indicated that it could be removed as soon as the next meeting, as inflation remains stubbornly high.

New York Times 4/29/26

Jerome H. Powell cited lingering legal threats against him and the Federal Reserve in explaining his decision to remain at the central bank.

Jerome H. Powell said on Wednesday that he would stay on as a governor at the Federal Reserve after his term as chair ends May 15,citing lingering legal threats against him and the central bank as part of a pressure campaign by President Trump for lower borrowing costs.

“After my term as chair ends on May 15, I will continue to serve as a governor for a period of time to be determined,” Mr. Powell said at a news conference on Wednesday.

Mr. Powell pointed to the legal attacks on the Fed as the reason for his decision.

Bloomberg 4/30/26

The European Central Bank kept interest rates unchanged, with officials signaling they need more time to assess the extent of the Iran war’s jolt to the economy.

The deposit rate was left at 2%, where it’s been since June 2025 and in line with the predictions of all analysts in a Bloomberg survey. The ECB offered no guidance on future decisions, reiterating it will act one meeting at a time based on information as it arrives.

“The upside risks to inflation and the downside risks to growth have intensified,” the Governing Council said on Thursday in a statement. “The Governing Council remains well positioned to navigate the current uncertainty.”

Bloomberg 4/30/26

European Central Bank policymakers are likely to raise interest rates at their next meeting in June unless there are positive developments on energy prices and ending the Iran war, according to people familiar with the situation.

Should the fighting persist, there’s only a very small chance a hike can be avoided, said the people, asking not to be identified discussing private talks. They stressed, however, that nothing has been decided and the situation can change quickly.

Truth Social April 21, 2026
@realDonaldTrump
STATEMENT OF PRESIDENT DONALD J. TRUMP:
Based on the fact that the Government of Iran is seriously
fractured, not unexpectedly so and, upon the request of Field
Marshal Asim Munir, and Prime Minister Shehbaz Sharif, of
Pakistan, we have been asked to hold our Attack on the Country
of Iran until such time as their leaders and representatives can
come up with a unified proposal. I have therefore directed our
Military to continue the Blockade and, in all other respects,
remain ready and able, and will therefore extend the Ceasefire
until such time as their proposal is submitted, and discussions
are concluded, one way or the other. President DONALD J. TRUMP

Wall Street Journal 4/29/26

Fed Chair Jerome Powell tells reporters that given the high uncertainty surrounding the conflict in the Middle East, the central bank is well positioned to wait when it comes to monetary policy. “We think our policy rate is in a good place,” said Powell. “Nobody’s calling for a hike right now-it’s really going to depend on how things evolve.”

“The labor market is probably cooling off a little bit,” he noted.

Bloomberg 5/5/26

Australia’s central bank raised its key
interest rate for a third consecutive meeting, with Governor
Michele Bullock signaling policymakers would now pause to assess
next steps..
The rate hikes give the RBA scope to determine its next
move, with policymakers watching if inflation expectations will
stay anchored, Bullock told reporters.

Bloomberg 4/9/26

President Trump called Benjamin Netanyahu yesterday and asked him to scale back Israel’s strikes in Lebanon to ensure the success of the Iran negotiations,NBC reports, citing an unidentified senior administration official.

• Israel agreed “to be a helpful partner,” the official tells NBC

@BarakRavid

Prime Minister Benjamin Netanyahu: In light of Lebanon’s repeated requests to open direct negotiations with Israel, I instructed yesterday to begin direct negotiations with Lebanon as soon as possible

Dow Jones – OTTAWA 4/29/26

The Bank of Canada on Wednesday kept its main interest rate unchanged at 2.25%, and signaled the rate may stay close to that level so long as the economy evolves as forecast.

The central bank’s quarterly forecast expects that inflation peaks in April at around 3% and assumes crude-oil prices fall to $75 a barrel by mid-2027. The forecast also anticipates no changes in U.S. tariffs on Canadian goods — so neither a breakthrough on U.S.-Canada trade talks nor an escalation in U.S. levies.

Overall, the Bank of Canada largely kept its growth forecast intact, noting the economy stands to benefit from current geopolitical volatility as a net exporter of crude oil. The economy resumed growth in early 2026 after a contraction in fourth quarter, the central bank said.

Bloomberg 4/8/26

A Chinese diplomat said Beijing had made its
“own efforts” in pushing for a ceasefire between the US and
Iran, shortly after Donald Trump credited China with playing a
pivotal role in that deal.
Chinese Foreign Ministry spokeswoman Mao Ning on Wednesday
listed the efforts her country had made in recent weeks to
deescalate the conflict at a regular briefing in Beijing,
without directly addressing reports China helped convince Tehran
to reach the truce.
“China has consistently advocated for a ceasefire and to
resolve the conflict through political and diplomatic means, and
to achieve long-term stability in the Gulf and Middle East
region,” she said, when asked about the detente. “China made its
own efforts in this regard.”

WASHINGTON (AP) 4/8/26

The number of Federal Reserve policymakers willing to consider an interest rate hike this year rose between the January and March meetings, as higher gas prices stemming from the Iran war threatened to worsen inflation in the coming months.

Minutes of the Fed’s March 17-18 meeting, released Wednesday, showed that “some” of the central bank’s 19 policymakers on its rate-setting committee supported changing their post-meeting statement to reflect the potential for a future rate hike. That is an an increase from “several” in January. The Fed doesn’t disclose precise numbers of how many officials supported each position, but in Fed jargon, ‘some’ is considered more than ‘several.’

And “many” of the officials pointed to the risk that higher oil and gas prices could keep inflation elevated for “longer than expected, which could call for rate increases” to push inflation back down.

Bloomberg 4/30/26

UK bonds extended a rally as traders pared bets on Bank of England interest-rate hikes, after officials left policy unchanged and Governor Andrew Bailey it was in a “reasonable place.”

The UK’s two-year yield, among the most sensitive to changes in monetary policy, fell 10 basis points to 4.45%. The 10-year yield was eight basis points lower at 4.99%. The moves extended as Bailey said in a news conference there’s not much “monetary policy can do” to prevent oil-driven cost increases from affecting UK businesses and households.

Wall Street Journal 3/30/26

Federal Reserve Chair Jerome Powell said Monday the central bank is inclined to hold rates steady and look past the energy shock from the war in Iran but cautioned that it might not be able to sit on the sidelines if rising prices begin to shift the public’s expectations about inflation over time.

Powell said energy disruptions have historically been short-lived and that the standard central-banking response is to wait them out. But he said the Fed couldn’t take that for granted after years of elevated inflation, and that officials would be watching closely for any signs the public is starting to expect persistently higher prices.

“You can have a series of these supply shocks and that can lead the public generally — businesses, price setters, households — to start expecting higher inflation over time. Why wouldn’t they?” Powell said.

Powell tiptoed away from saying how the Fed would answer that riddle. “We will eventually maybe face the question of what to do here. We’re not really facing it yet because we don’t know what the economic effects will be,” he said during a question-and-answer session with undergraduate students at Harvard University’s introductory economics course.

Bloomberg 3/30/26

The Bank of Japan’s policy board presented a
hawkish posture in a summary of opinions aired during their
meeting earlier this month, with one member hinting at the
possibility of having to respond to the Middle East conflict
with a bigger rate hike than those recently undertaken.
“If there are no signs of a significant deterioration in
the economic environment or in the wage setting stance of small
firms, the bank will need to raise the policy interest rate
without hesitation,” one of nine board members said, according
to a summary of the March 18-19 meeting released Monday.

Bloomberg 4/7/26

US job growth rebounded in March and the unemployment rate unexpectedly fell, suggesting the labor market was stabilizing as the Iran war began.

Nonfarm payrolls rose 178,000 last month, the most since the end of 2024, after revisions showed a sharper decline in February, according to Bureau of Labor Statistics data out Friday. That was higher than all estimates in a Bloomberg survey.

The solid increase will likely reinforce the Federal Reserve’s focus on inflation risks amid a rapid run-up in energy prices sparked by the war in Iran.

The outsize increase in payrolls in March followed a revised 133,000 drop in the prior month, which marked one of the biggest declines since the pandemic. But on average, payrolls rose 68,000 in the first three months of this year, the strongest run in almost a year.

Reuters – London – 4/1/26

Bank of England Governor Andrew Bailey said on Wednesday that markets were still getting ahead of themselves by pricing in ​interest rate hikes by the central bank in response to the ‌hit to the British economy from the Iran war.

“(The market)’s still pricing us to raise rates. I would still ​say that is a ​judgment markets have ⁠to make but I think they’re getting ahead of themselves,” Bailey said.

Bloomberg 3/18/26

Treasuries came under selling pressure on Wednesday, led by the front-end of the curve after the Federal Reserve held rates steady in an 11-1 vote, while upgrading growth projections and still forecasting one cut by the end of this year. In the press conference, Chair Jerome Powell said there couldn’t be rate cuts until there is progress on inflation and didn’t rule out potential for rate hikes in the future, though that’s not a base case for the Fed

Bloomberg 3/18/26

*FED SAYS GOVERNOR STEPHEN MIRAN DISSENTS IN FAVOR OF RATE CUT

Bloomberg 3/17/26

Australia’s central bank raised its key
interest rate for a second straight meeting on Tuesday, stepping
up its battle against stubborn inflation as rising energy costs
from the widening war in Iran threaten to intensify price
pressures.
The Reserve Bank’s nine-member policy committee split five-
to-four in favor of raising the cash rate to 4.1% from 3.85%.
This was the first back-to-back hike since mid-2023 and reverses
two of the three cuts delivered last year.