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Macroeconomic & Geopolitical

Central Banks & Cheap Oil Keep on Rollin'

12 March 2020 - 3 min read

Central banks have turned accommodative as oil prices continue to decline and digital taxes on tech companies are likely to be implemented by early Spring. Watch for FOMC and BOJ meetings next week for further easing.


Arrows indicate consensus forecast compared to the previous period. Local dates of release.


  • The FOMC is expected to cut the fed funds rate at its Wednesday meeting, following a 50 bps inter-meeting cut on March 3. The consensus forecast is for a second 50bps cut in March, while markets are pricing in a 75bps cut. With lower oil prices and weaker demand due to the virus outbreak, subdued inflation will give the Fed more wherewithal to conduct simulative policies.
  • Lower interest rates are a boon to refinancing activity and the housing market. With rising mortgage applications and a labor market that is still in good shape, strong demand will continue to support strong housing market data next week.


  • We expect to see further talks of fiscal stimulus packages in Europe to aid their economies against the outbreak, as most countries have enough fiscal space to act.

Asia Pacific

  • The BoJ will likely enact accommodative policy at their meeting—such as expanding asset purchases—but odds are that they will stop short of dragging their rate further into negative territory.

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