BOE’s Greene is speaking and says: Core and services inflation are going sideways.Indications are in disinflation process is slowing. Concerned about second-round effects of inflationFirms more sensitive to upside inflation surprises.Policy not meaningfully restrictiveShould slow down rate cutting cycleSlack has opened up in the labor market making wage part of wage price spiral less likely. Latest rising UK unemployment is in line with what we were expecting.We should not cut rates every quarter, but rate cutting cycle not over.The cautionary comments point to more steady policy with still a downside in rate bias.
This article was written by Greg Michalowski at investinglive.com.
đź’ˇ DMK Insight
The Bank of England's Greene is painting a picture that feels all too familiar—core inflation and services are stuck in a holding pattern, like a bad sitcom that just won’t end. With disinflation losing steam and firms bracing for inflation surprises, it’s clear that the monetary policy party isn’t quite ready to call it a night. The labor market's newfound slack might sound like good news for wage earners, but for traders, it signals a cautious approach ahead. In a twist, it seems the BOE is more concerned about inflation's sequel than the original plot, reminding us that sometimes, the sequel is worse than the first.
đź“® Takeaway
As inflation dynamics shift, traders should brace for a longer, more cautious rate-cutting cycle.




