Weekly Economic & Financial Commentary: A Wait-and-See Approach

U.S. Review

A Wait-and-See Approach

• The unanimous decision by the FOMC to keep rates unchanged this week was widely expected, but the committee’s increased caution regarding the outlook reaffirmed its wait-and-see approach to monetary policy.
• In other news, the Leading Economic Index for February suggests economic growth will continue, but with the positive contributions to the index getting smaller on trend, the index suggests a moderation in the pace of growth.

Global Review

Brexit Uncertainties Persist, Norges Bank Goes Hawkish

• As the end-March deadline approaches, Brexit developments continue to dominate headlines. U.K. Prime Minister Theresa May has stated her intention to seek a delay to the deadline, while U.K. parliament might reconvene again to vote on May’s deal. Amid Brexit, the Bank of England held policy rates steady this week as uncertainty is likely to persist for the time being.
• The Central Bank of Norway opted to raise interest rates at this week’s monetary policy meeting and suggested more hikes may be coming. As other major central banks have become more dovish, Norges Bank has undertaken a more hawkish path as oil prices recover and the domestic economy improves.

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