Ooooh. Color! This week’s focus is on major central bank activity with the European Central Bank (ECB), the US Federal Reserve and the Bank of Japan (BoJ) all scheduled to make policy announcements at the conclusion of their respective meetings. Beginning Wednesday with the US Fed, market observers are widely expecting a further 0.25% increase in the Federal funds rate but the focus will be on which words are selected and projections going forward. The ECB follows on Thursday and the key to their statement will be any adjustments they intend to make regarding the bond buying program and the impact on the balance sheet, pictured below. The BoJ closes out the week on Friday and market participants are largely expecting no change to current policy given inflation is below target and the tightening labor market does not appear to be adversely impacting prices.
