Central banks & rates
What central banks decide, how markets read it, and where yields go next. Every note filed under this section.
10 notes, newest first
RSSHow AI Infrastructure Debt Raises Borrowing Costs for All
UK gilt yields hit an 18-year high partly due to tech firms issuing euro debt for AI data centres. The ECB highlights how this crowds out other borrowers and spreads credit risk across the financial system.
Six Central Banks Align on Rate Hikes Over One Shared Cause
Sweden, Japan, the euro area, India, Rwanda and the Federal Reserve all shifted hawkish within six weeks. Several named the same geopolitical driver, revealing a traceable supply-side transmission rather than coordinated global inflation.
Headline PCE Diverges from Core in July Release Amid Energy Pressure
The July PCE release highlighted a clear split between headline and core measures. Headline came in at 3.7% while core printed 3.3%, showing how energy shocks widen the gap between the two. The market's shifting interpretation of the same data over six hours underscores that the print is only half the story.
PCE vs CPI: Why the Fed Targets the Less-Watched Gauge
CPI grabs headlines and moves markets, but the Federal Reserve targets PCE for its 2% inflation goal. The two measures often diverge due to coverage and substitution effects, creating real consequences for policy decisions.
Why Some Inflation Responds to Interest Rates and Some Doesn't
Not all inflation behaves the same. This analysis explains why interest rates tame demand-driven price rises but struggle with supply shocks and imported costs. Currency channels and economic openness determine whether the tool actually works.
How a Conflict Becomes an Interest Rate Decision
A single conflict can travel from oil prices to inflation expectations and finally into monetary policy. This post traces the full chain and shows why central banks eventually name the event in their statements.
What Low Cash Levels Reveal About Market Capacity
Bank of America’s fund manager survey shows uber-low cash holdings, yet bond yields are rising sharply. Low cash signals committed capital rather than mere optimism, highlighting reduced capacity to absorb surprises.
Yen Carry Trade Unwinds: Why Tokyo Shakes Global Markets
A Japanese rate decision can trigger selloffs in crypto, tech, and emerging markets. The yen carry trade links distant assets through cheap funding mechanics. Understanding the unwind explains sudden drops with no obvious local cause.
What Is Core PCE — and Why Does It Exclude the Thing Everyone's Paying For?
Core PCE fell for the first time since the pandemic while petrol prices climb. Learn what this Fed-preferred inflation gauge measures, why it strips out food and energy, and how to read the data without getting misled.
How to Trade Fed Rate Decisions: Hold, Hike & Market Reactions
The Fed decision isn't a coin flip—it's an environment to prepare for. Learn how to read the three scenarios instead of guessing the outcome and avoid costly mistakes on decision day.