POLAND: MPC's Litwiniuk Refuses To Rule Out November Cut
Oct-28 08:07
- Przemysław Litwiniuk of the National Bank of Poland (NBP) told PAP news agency that another 25bp interest-rate cut this year could not be ruled out, despite guarded comments from his colleagues earlier this month. Litwiniuk admitted that his views changed since the immediate aftermath of the October meeting, when he had been more cautious. However, 'the latest inflation data (...) allows us to remain open to an adjustment scenario also in the context of the November meeting.' The official reiterated that the series of cuts (to the tune of 125bp this year) has not amounted to an easing cycle, but was a sequence of autonomous decisions, with each based on a formula that took account of data available on the day of the specific vote. A similar approach will be taken in November, when the MPC will also have a fresh macroeconomic projection.
- Energy Minister Miłosz Motyka told TVN24 that household electricity price freezing will end next year, but the government does not see room for price increases and is hoping that the new tariff could fall below the current price cap of PLN500/MWh. He advised consumers to make use of flexible tariffs, which reflect real-time wholesale market conditions.
- Civic Coalition's (KO's) Tomasz Siemoniak said that he 'would be proud' if he would be on the same electoral lists as 'colleagues from the PSL [Polish People's Party]'. The KO has recently morphed from an ad hoc electoral alliance into a political party and there is speculation that the next step might involve contesting the 2027 elections in coalition with the PSL, allowing Prime Minister Donald Tusk to assert greater dominance over his junior partners. The centre-right PSL polls below the 5% electoral threshold but the KO could throw it a lifeline as part of some political deal.
- A freshly gazetted announcement showed that regular hawkish dissenter Joanna Tyrowicz was the only MPC member who voted against the 25bp interest-rate cut and against the adoption of the Monetary Policy Guidelines for 2025 at the September meeting.
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MACRO ANALYSIS: MNI US Macro Weekly: FedSpeak Reaffirms Range Of Cut Views (2/2)
Sep-26 20:16
While we heard the monetary policy views of 6 of 12 current FOMC voters this week, there were no real surprises. We go through all of the relevant FOMC communications in full in our Macro Weekly PDF.
- Chair Powell reiterated that policy is not on a preset course; Gov Bowman and Gov Miran reiterated their more-dovish-than-median views; Musalem and Schmid suggested only limited scope for easing; and Goolsbee eyed neutral rates 100-125bp lower but was “uneasy” with too much front-loading.
- Virtually of the week’s FOMC speakers noted labor market risks had begun to surface, but had varying concerns about inflation. To sum up:
2025 FOMC Voters:
- Powell Reiterates "There Is No Risk-Free Path", Policy Not On Preset Course (Sep 23)
- Gov Bowman: Concerned Will Need Faster And Bigger Cuts (Sep 23)
- St Louis's Musalem: Limited Room For Easing, Policy May Be Close To Neutral (Sep 22)
- Chicago's Goolsbee Eyes Neutral Rates 100-125bp Lower (Sep 23), Uneasy With Too Much Cut Frontloading (Sep 25)
- Gov Miran: Appropriate Rates In 2.00-2.50% "Ballpark" (Sep 22)
- KC Fed's Schmid: Slightly Restrictive Policy The "Right Place To Be" (Sep 24)
Non-2025 Voters:
- Atlanta's Bostic Pencils In No More Cuts this Year, But Watching Data (Sep 22), Longer-Run Dot Suggests Limited Impetus To Cut Further (Sep 23)
- SF's Daly: Likely Further Cuts Will Be Needed To Support Labor Market (Sep 24)
- Cleveland's Hammack: Policy Very Mildly Restrictive, Concerns On More Cuts (Sep 22)
- Dallas's Logan: Time To Move From Fed Funds Policy Rate To Tri-Party Repo (Sep 25)
- Barkin: Jobs Shakier, Inflation Less Troubling (Sep 26)
MACRO ANALYSIS: MNI US Macro Weekly: Too Solid For Comfort (1/2)
Sep-26 20:13
We've just published our US Macro Weekly - Download Full Report Here
- The US economy now appears to be on more solid footing than it seemed a week ago. Versus 45bp in Fed rate reductions through the remainder of 2025 as of last Friday, futures markets now price 40bp. Half of that retracement came Thursday at 0830ET, when Q2 GDP data, initial jobless claims, durable goods orders, and goods trade data all pointed to stronger ongoing GDP growth than previously anticipated.
- Q2 GDP growth was revised up significantly in the 3rd and final reading, to 3.84% Q/Q SAAR from 3.29% in the 2nd reading (consensus had expected this to be unchanged in the 3rd).
- And while that’s in the past, the latest monthly data saw the Atlanta Fed's GDPNow estimate for Q3 jump to 3.9% from 3.3% last week.
- Friday’s PCE data suggested solid consumption dynamics through August (and no nasty surprises in the core inflation data).
- As such, the week’s data almost unambiguously portrayed a better domestic demand story through – and beyond – a volatile first half of the year related to tariff policy shifts.
- That poses something of a quandary for a Fed that has shifted its sights to labor market risks. GDP is not employment, but a case for rate cuts at a time when inflation is still pushing 3% is tougher to make when the economy is growing at close to a 4% real pace and equities remain at or near all-time highs.
- October's cut is no longer such a sure thing as it seemed after the September meeting, with a 25bp ease now priced at 21bp (~84% implied prob), versus closer to 23bp (90+%) at the end of the prior week.
US TSY OPTIONS: BLOCK: Large Nov'25 5Y Risk Reversal, Covered
Sep-26 19:44
- +30,000 FVX5 108.5/109.5 call over risk reversals, 0.5 net vs.
- -18,000 FVZ5 108-31.75 at 1536:10ET
