HUF: ING Raise Possibility of Steady Rates in 2026, GS Lift Year-End Forecast
Yesterday’s in-line with expectations CPI data did little to alter the macroeconomic picture, as the August figures support the expectation that the NBH will keep its base rate unchanged at 6.50% for potentially the remainder of the year. Meanwhile, today’s minutes release continued to point towards the worryingly high levels of household inflation expectations. Following the data, ING flag the possibility of rates remaining unchanged for most of 2026, while Goldman Sachs have raised their year-end policy rate forecast to 6.25% from 6.00%:
- Given their view on inflation, ING believe that a hawkish monetary policy stance and an unchanged base rate will certainly remain in place in the short term. However, they say they are becoming less convinced about their 2026 baseline rate path (a total of 100bps of easing), noting that “An alternative scenario would be for the base rate to remain at 6.50% for most, if not all, of 2026.”
- Goldman Sachs note that although lower inflation argues for lower interest rates, heightened external uncertainties provide a reason for monetary policy caution and, reflecting this factor, they have recently raised their year-end rate policy rate forecast from 6.00% to 6.25%, but continue to expect a terminal rate of 4.00%.
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US: Trump 'See What Happens' w/China Pause, Zelenskyy Not Included In Putin Meet
President Donald Trump has told reporters at the White House, "we'll see what happens" with the China tariff and export control pause that expires at midnight tonight. Trump adds: "We've been dealing very nicely with China. They have tremendous tariffs," but "we'll see what happens". LIVESTREAM The prevailing view is that Trump will endorse a 90-day extension to the pause.
- Trump says on Friday's Alaska meeting with Russian President Vladimir Putin, "This is really a feel out meeting". He says: "Putin invited me to get involved... I believe he wants to get it over with." Adds: "Now, I've said that a few times and been disappointed," cites previous meetings that have been followed by Russian airstrikes.
- Trump: "I'm going in to speak with Vladimir Putin and I'm going to be telling him 'you've got to end it' ... I think we'll have constructive conversations." Trump's tone suggests that he is managing expectations of a major breakthrough in Alaska.
- Trump says that "immediately" after the meeting, he will call European leaders. Trump notes that he "gets along" with Ukrainian President Volodymyr Zelenskyy but disagrees with 'a lot of what he's done'. He notes that the next meeting will be either a bilateral between Zelenskyy and Putin or a trilateral with Trump's involvement.
- Trump's comments comes amid an extended press conference after his Washington DC emergency declaration. Earlier Trump suggested that other Democrat-run cities, including Los Angeles, New York, Baltimore, Chicago, Portland, and Oakland, could be subject to similar federal law enforcement operations. He says, "Democrats are weak on crime".
FED: US TSY 26W BILL AUCTION: HIGH 3.970%(ALLOT 27.15%)
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