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Monetary Policy

Follow central bank decisions, rate paths, balance-sheet shifts, and the inflation evidence behind policy guidance.

Monetary Policy
Monetary Policy

War Shock and Inflation Anchoring: The Relativist Logic Behind the ECB's 25 Basis-Point Rate Hike

On June 11, 2026, the European Central Bank announced a 25-basis-point rate hike, pushing the deposit facility rate up to 2.25%. Against the backdrop of an energy shock triggered by the Middle East war, the ECB chose to defend its 2% inflation target through tightening, even though growth forecasts had been downgraded. This article interprets the deeper implications of this decision from the perspectives of supply shocks, monetary transmission, and long-term cycles.

Wei Chen5 min read
Monetary Policy

Hong Kong Dollar Follows US Dollar Rate Cut Again: Policy Synchronization under the Linked Exchange Rate System and the New Global Easing Landscape

The Hong Kong Monetary Authority again followed the Federal Reserve's 25 basis point rate cut, with commercial banks partially following suit. This article begins with the linked exchange rate system, analyzes the transmission mechanism of the dollar cycle to Hong Kong dollar interest rates, and explores the impact of Federal Reserve policy uncertainty on the subsequent easing path.

Sofia Martinez4 min read
Monetary Policy

Federal Reserve Keeps Interest Rates Unchanged: Global Monetary Policy Enters a Period of 'Hovering at High Levels'

The Federal Reserve kept its interest rate range at 3.50%-3.75% unchanged at its July 2026 meeting, with three committee members dissenting. This article analyzes the economic logic behind this decision from a global macroeconomic perspective, exploring the impact of sustained high interest rates on inflation, capital flows, and long-term economic cycles.

Elena Rossi5 min read
Monetary Policy

Three Major Central Banks Simultaneously Stand Pat: Monetary Policy Enters a Wait-and-See Period, with Inflation and Trade Risks Dominating the Global Interest Rate Path

The Federal Reserve, the Bank of Mexico, and the European Central Bank all held interest rates steady in early 2026, reflecting a strategic wait-and-see phase in global monetary policy. Sticky inflation, trade tariffs, and structural labor shifts are redefining central banks' decision-making frameworks.

Wei Chen7 min read
Monetary Policy

Risk of ECB rate hike repeating the 2011 mistake

The European Central Bank plans to raise interest rates next week, a strategy that led to an economic recession in 2011. With the eurozone facing the risk of recession, historical lessons are worth heeding.

Alistair Vance3 min read
Monetary Policy

The market has not truly priced in geopolitical and fiscal risks: the global macro signals behind the European Central Bank’s warning

The European Central Bank pointed out that the market is still insufficiently pricing in the risks brought by the Middle East conflict and rising government debt. At a deeper level, this is not only a reminder about Europe’s financial conditions, but also reflects that the world has entered a new macro phase of high uncertainty, low tolerance, and strong repricing.

Sofia Martinez6 min read
Monetary Policy

Sri Lanka raises interest rates by 100 basis points: how the Middle East energy shock pushes vulnerable economies back into “defensive mode”

Sri Lanka responded to soaring energy prices, pressure on its exchange rate, and a rebound in inflation with its largest interest rate hike in three years. This is not only a shift in monetary policy by a single country, but also reflects how the conflict in the Middle East is reshaping the macroeconomic vulnerabilities of emerging markets through oil prices, capital flows, and the foreign exchange market.

Elena Rossi7 min read