How to Read & Use This Tool

A general term for trading techniques aimed at profiting from price differences between different markets or symbols. This tool is used to analyze the relationship between symbols.

① Arbitrage

The value calculated as Symbol A's price ÷ Symbol B's price. It expresses the relative strength of two symbols in a single number. Example: if EURUSD ÷ USDJPY rises, EURUSD is becoming relatively stronger than USDJPY.

② Price Ratio

A trading method where, when the ratio of two highly correlated symbols deviates significantly from the long-term average, you sell the stronger side and buy the weaker side—profiting from the "ratio deviation" rather than the individual price movements.

③ Pair Trading

The statistical tendency for prices or ratios to return to their long-term average. When ratios trade within a range, the assumption that extreme values revert to the mean tends to hold true.

④ Mean Reversion

4 Key Terms to Know First

Chart the ratio A÷B as a time series. Easily understand "which side is dominant" and "when the dominance shifted."

Visualize 2-Symbol Comparison

Spot the moment a ratio significantly deviates from its average, or breaks out of a long-term range. Useful for planning mean-reversion pair trading strategies.

Discover Pair Trading Opportunities

Compare combinations of currency pairs, indices, commodities, and cryptocurrencies. Useful for evaluating portfolio diversification and planning hedging strategies.

Portfolio & Correlation Analysis

What Can This Tool Do?

Symbol A is becoming relatively stronger than Symbol B. A is rising more / falling less than B.

Ratio Rising → Symbol A Dominant

Symbol B is becoming relatively stronger than Symbol A. B is rising more / falling less than A.

Ratio Falling → Symbol B Dominant

Both symbols moving at the same pace. Extreme deviations create mean-reversion pair trading opportunities.

Ratio Flat → Range Market

A sudden ratio change may indicate a major news or economic indicator for one symbol. Identifying the cause is critical.

Sudden Change → Major Event

Reading the Price Ratio Chart

The absolute value of a ratio like EURUSD ÷ USDJPY (e.g., 0.0073) has no special meaning. What matters is "whether it's rising or falling," "how far it has deviated from the long-term average," and "when major changes occurred."

⚠️ Focus on the "Change," Not the Absolute Value

Choose pairs that are economically or statistically correlated. Examples: currencies from the same region (EUR-based, commodity currencies), commodities of the same category (gold and platinum, oil and natural gas), or indices from the same region (Nikkei and TOPIX, S&P 500 and Nasdaq 100). Comparing unrelated symbols won't reveal meaningful patterns.

💡 Golden Rule for Symbol Pair Selection

Pattern A — Persistent Uptrend

Pattern B — Persistent Downtrend

Pattern C — Stable Range (Mean Reversion)

Pattern D — Breakout (Structural Change)

4 Key Patterns to Remember

5-Step Usage Workflow

Pick economically or statistically related symbol pairs (same-region currencies, same-category commodities, same-region indices). Comparing unrelated symbols yields no meaningful patterns.

Select 2 Symbols to Analyze

Check the ratio's movement on both long-term and short-term timeframes. Identify which pattern (A–D) applies and how far the current ratio is from the long-term average.

Check the Current State on the Price Ratio Chart

Check the economic factors behind the ratio's movement (interest rate differentials, policy, supply/demand, geopolitics). Judge whether the move on the chart is "structural" or "temporary."

Confirm Fundamental Factors

Analyze each symbol in detail with MT4/MT5 or other Research Hub tools (Trend Analysis, RSI Analysis, etc.). Set entry / stop loss / take profit.

Detailed Analysis of Individual Symbols

Based on the analysis results, execute regular trades on each symbol.

Execute Strategy

Comparing unrelated symbols reveals only noise. Choose economically related pairs: same-region currencies, same-category commodities, or same-region indices.

✔ Choose Highly Correlated Symbol Pairs

Only short-term views can be misled by temporary fluctuations; only long-term views miss current opportunities. Checking both timeframes is essential.

✔ Check Both Long-Term and Short-Term

Understanding the economic factors behind ratio movements (rate differentials, policies, supply/demand) helps distinguish "temporary noise" from "structural change."

✔ Verify Fundamentals Alongside

Combining with Trend Analysis, RSI Analysis, Volatility Heatmap, etc. enables more comprehensive and accurate analysis.

✔ Combine with Other Research Hub Tools

The ratio only shows "relative movement," not each symbol's absolute movement or risk. Always confirm individual symbol charts and news.

✘ Don't Judge by the Ratio Alone

Sudden movements during breakouts are hard to classify as structural change or temporary overreaction. Identify the cause calmly before deciding.

✘ Don't Chase Sudden Movements

Employment data, policy announcements, geopolitical events temporarily move ratios significantly. Note that pattern recognition reliability drops around announcements.

✘ Don't Ignore News Events

Even with thorough analysis, markets can move unexpectedly. Always set stop losses and limit risk per trade to 1–2% of your account.

✘ Don't Skip Risk Management

Do's and Don'ts

Frequently Asked Questions (FAQ)

Glossary (Mini-Dictionary for FX Beginners)

This is known as a "hawkish hold." Behind it lie rising energy prices tied to Middle East tensions, along with the persistence of wages and services prices. The statement went so far as to say that "CPI could rise further later in the year, and policy needs to guard against the risk of second-round effects on wages and prices." The tone has shifted clearly from the "gradual cuts" path of 2024-25.

The next move is tomorrow:

The easing cycle paused after six cuts (1.5% in total). Markets once expected further cuts during 2026, but amid the risk of resurgent inflation and the hawkish split in the vote, they have instead shifted to pricing in a hike. It is a tricky phase where "up or down next" is hard to read.

Note that the hawkish call at the April meeting was based on the March CPI (+3.3%) available at the time. The April figure released afterward fell to +2.8%, so the data is leaning a little calmer. In the labour market, the unemployment rate has risen to 5.0%, a sign of slowing growth too. The tug-of-war between inflation and the economy continues.

Following the hawkish hold, the UK 10-year yield rose above 4.8%, the highest in about half a year. The slack in supply-demand from QT is one factor pushing long-term rates up. Holding rates steady while continuing to tighten on the balance-sheet side - that combined effect is being felt in markets.

Because of this transparency, a split vote itself (e.g., 8-1, 5-4) becomes a powerful message. This time the "dissent = hike" shows there are clearly inflation hawks within the committee, reinforcing the market's hawkish read. The minutes are published at the same time, so the substance of the debate can be read too.

Decisions are published at noon UK time alongside the minutes. At tomorrow's June 18 meeting, the focus is how the committee weighs the conflicting signals: upside inflation risk from higher energy prices versus April's slower CPI and the rising unemployment rate.

How to read FX and rates:

This is what is known as a "hawkish hold." Governor Bailey explained the decision by saying that "the global backdrop looks more uncertain and inflationary" (US–Iran tensions and the like), while "the domestic price environment is more benign." The Bank is striking a balance between upside risks from abroad and calmer conditions at home. With energy prices swinging widely, it is watching carefully.

Hawks steadily rising:

The easing cycle paused after six cuts (1.5% in total). Markets once expected further cuts during 2026, but amid the risk of resurgent inflation and a hawkish split in the vote, they have shifted toward pricing in a hike instead. It is a tricky juncture, with "up or down next" hard to read.

Although inflation is calming for now, the BoE is wary of upside risks ahead. Energy prices have fallen since the previous meeting but remain high and volatile. In the labour market, the unemployment rate has risen to 5.0%, showing signs of a slowing economy. Caught in a tug-of-war between the risk of a rebound in inflation and economic weakness, the Committee is holding to watch and wait, yet the calls for a hike cannot be ignored — a difficult stretch continues.

With dissents calling for a hike having risen, markets are alert to upward pressure on UK gilt yields. The looser supply-demand balance from QT is another factor lifting long-term rates. Holding the rate steady while continuing to tighten on the balance sheet — that combined effect is being felt in markets.

Because of this transparency, the split itself becomes a powerful message. Follow the run of votes — March 9–0 → April 8–1 → June 7–2 → July 6–3 — and the "hawks" calling for a hike have grown by one each time. Dissents reaching three reflects the Committee's rising vigilance on inflation. With just one or two more votes able to flip the majority, markets have begun to reckon with the possibility of hikes resuming. The minutes are published at the same time, letting readers see the substance of the debate.

Decisions are published at noon UK time, together with the minutes. At the next meeting on 17 September, attention will focus on how the Committee weighs the conflicting forces of upside inflation risk from abroad and calming domestic prices. Should dissents rise further, a hike becomes all the more real.

How to read currencies and rates:

This is known as a "hawkish hold." Energy prices fell after the previous meeting, but they remain high and volatile. The BOE kept its guard up, saying "CPI could rise further later in the year, and policy needs to guard against the risk of second-round effects on wages and prices." From the unanimous vote (9-0) at the March meeting, the committee has steadily taken on a more hawkish tilt.

The next move is in July:

Although prices are settling down for now, the BOE is wary of upside risk ahead. Energy prices may have fallen since the previous meeting, but they remain high and volatile. In the labour market, the unemployment rate has risen to 5.0%, with signs of slowing growth too. Amid the tug-of-war between the risk of resurgent inflation and economic weakness, the committee is holding to watch and wait, yet it cannot ignore the calls for a hike - a difficult phase continues.

With dissenting votes for a hike rising to two, markets are mindful of upward pressure on UK government bond (gilt) yields. The slack in supply-demand from QT is one factor pushing long-term rates up. Holding rates steady while continuing to tighten on the balance-sheet side - that combined effect is being felt in markets.

Because of this transparency, a split vote itself becomes a powerful message. Following the flow of the vote - 9-0 (unanimous) in March, 8-1 in April, 7-2 in June - the "hawks" calling for a hike have grown step by step. This time the rise to two "dissent = hike" votes mirrors the committee's heightened inflation vigilance and reinforces the market's hawkish read. The minutes are published at the same time, so the substance of the debate can be read too.

Decisions are published at noon UK time alongside the minutes. At the next meeting on July 30, a fresh economic outlook will be presented together with the Monetary Policy Report (MPR). The focus is how the committee judges the conflicting signals: the slower CPI, the upside risk from energy prices, and the rising unemployment rate.

The latest core CPI (March) came in at +1.8%, still below target. The BOJ nonetheless set a bullish forecast, reflecting confidence in the virtuous wage-price cycle as well as higher energy prices tied to Middle East tensions beginning to push prices up. Governor Ueda said the Bank would "continue to raise the policy rate" if the economy and prices track the outlook, leaving the door open to further rate hikes.

A groundwork meeting:

At 0.75%, the rate remains considerably low compared with the US (3.6%) or the UK (3.75%). This wide rate gap is the main driver of the persistent weak yen. As the BOJ raises rates, the gap narrows, but the pace is cautious. The Bank is moving one step at a time, checking whether the virtuous wage-price cycle is becoming firmly established.

Excluding energy and food, core-core CPI is at +2.4%, meaning the underlying inflation trend already exceeds 2%. Wage gains are being passed through to prices and services prices have been rising - the entrenchment of this "virtuous wage-price cycle" is the basis for both the bullish outlook and the stance toward further hikes. That said, the gap between the current reading (1.8%) and the forecast (2.8%) is large, and if higher energy prices run their course the forecast could undershoot.

Raising rates while avoiding abrupt shifts in the government bond market - managing this "two-front normalization" carefully so as not to surprise markets is the BOJ's challenge. Long-term interest rates (the 10-year yield) have edged up to reflect normalization, and this will feed through to mortgage and corporate borrowing rates.

The decision is announced around midday on the second day, followed by the Governor's press conference. At the January, April, July and October meetings, the "Outlook Report" presenting the economic and price outlook is released alongside, drawing particular market attention. This April meeting was one of those Outlook Report releases.

The market's biggest focus is when the next hike comes. Following the bullish Outlook Report and Governor Ueda's remarks, the market has begun to factor in an additional hike toward the summer. The decision at the next June meeting will be the next clue.

Even as a hold, the substance leaned forward. In the Outlook Report released at the same time, the BOJ went a step further, projecting that inflation will run "clearly above 2%" from the second half of fiscal 2026. The reasons: pass-through of wage increases into prices, higher crude oil, and a roughly 40-year-low yen. It also upgraded its real GDP growth forecast. The BOJ reaffirmed its stance toward further tightening, stating that "if the economy and prices evolve in line with the outlook, it will continue to raise the policy rate."

The next focus is "when to hike":

While other economies are in a phase of "coming down the mountain," Japan is at the stage of "finally starting to climb." Even so, 1.0% is still quite low compared with the US (3.6%) or the UK (3.75%). This large rate gap has been the main driver of the persistent weak yen. As hikes proceed, that gap will gradually narrow.

Core-core CPI, which excludes energy and food, is also +1.9%, so the underlying trend in prices is closing in on 2%. On top of the pass-through of wage increases into prices, higher crude oil and a roughly 40-year-low yen push inflation up through import prices. The BOJ cited these three as grounds for inflation running clearly above 2%. With the real GDP growth forecast also upgraded, it can be said that the conditions for resuming rate hikes are falling into place.

The BOJ is reducing its purchase amount step by step each quarter, trimming to around 2 trillion yen per month in January–March 2027, after which it will halt the reductions. Raise rates while avoiding sudden swings in the JGB market — the challenge for the BOJ is to advance this "two-front normalization" carefully, so as not to surprise the market.

Governor Ueda chaired the meeting (at the previous June meeting he was absent due to hospitalization, and Deputy Governor Uchida stood in). The meeting was deliberated over two days, with the decision published around midday on the second day. The dissent by the hawkish Takata reflects voices within the board that "the BOJ should hurry to hike further."

The market's biggest interest is when the next hike comes. With a weak yen and upside inflation risks, speculation over another rate hike within the year continues to simmer. The next Outlook Report will be published at the October meeting (October 29–30). Moves in prices, wages and the exchange rate until then will sway the decisions at the September and October meetings.

Behind the move is the entrenchment of a virtuous wage-price cycle. With high pay raises continuing for a third straight year (the first tally of the 2026 Shunto came in at +5.26%), Deputy Governor Uchida made the path of further hikes clear at the press conference, saying the Bank would "continue to raise the policy rate" in response to economic, price, and financial developments. The risk that higher oil prices tied to Middle East tensions could push up inflation also supported the hike.

"Normalization" now:

While other countries are "coming down the mountain," Japan has only "just begun to climb." Even so, at 1.0% it remains considerably lower than the United States (3.6%) or the UK (3.75%). This wide rate gap has been the main driver of the long-running weak yen. As the Bank raises rates further, the gap will gradually narrow.

Core-core CPI, which also excludes energy and food, was +1.9%, with the underlying trend in prices edging toward 2%. Pay raises are being passed through into prices, and service prices have been rising — the judgment that this "virtuous wage-price cycle" has taken hold is the basis for the hike. That said, the gap between the current reading (1.4%) and the outlook (2.8%) is large, and the projection could undershoot if higher oil prices run their course.

The BOJ is reducing its purchase amount in stages each quarter, trimming it to about ¥2 trillion per month by the January–March 2027 quarter, after which it will halt further reductions. Raising rates while avoiding abrupt swings in the JGB market — managing this "two-front normalization" carefully, without surprising markets, is the BOJ's challenge.

The chair is normally Governor Ueda, but this time Deputy Governor Uchida stood in at the press conference. The Governor's hospitalization was described as "short-term, with no impact on policy management." The meeting was held over two days, and the decision is announced around midday on the second day.

The market's biggest focus is when the next hike will come. With Deputy Governor Uchida signaling openness to further hikes, speculation lingers about another increase within the year. How the July Outlook Report frames the outlook for prices and wages will be the next clue.

Reading FX and rates:

Behind the hold was a shift in the price winds. March HICP (consumer prices) rose to +2.6% year on year, up from +1.9% in February. Higher energy costs tied to Middle East tensions had begun to bite. President Lagarde stressed a cautious stance — decisions are "made meeting by meeting based on the data, without committing to a particular rate path" — signaling no rush to resume cuts and a readiness to assess the price trend.

A prelude to "next is a hike":

2.00% is also the "trough" of the easing cycle. Had prices settled, a debate over further cuts from here should have emerged — but with prices re-igniting on higher energy costs, the flow reversed. The bank has entered a difficult phase where the next move has to be seen as "up," not "down."

With prices breaking above the target and accelerating, the ECB's calculus shifts from "resuming cuts" toward "considering a hike." Wage-sensitive services prices are also staying high at around +3%, and whether high prices spread beyond energy became the next focus.

The marginal lending facility (2.40%) is the ceiling rate at which banks borrow overnight from the ECB, and the main refinancing operations rate (2.15%) sits in the middle. The three form a corridor that sets the "ceiling, middle and floor" of market rates.

The governors' rotation is weighted by economic size. The top five countries — Germany, France, Italy, Spain and the Netherlands — share 4 votes, and the other 16 countries share 11 votes, each on a monthly rotation. Most decisions are reached by something close to unanimity (consensus).

The decision is announced at 14:15 Central European Time, with the President's press conference from 14:45. The next, June meeting will publish new staff projections, and the biggest focus is how much of the upside in prices gets reflected — and whether the easing cycle reverses into a "hike."

Cooling prices provided a tailwind. June HICP (consumer prices) came in at +2.8% year on year, easing from +3.2% in May, and energy-price gains also began to soften. President Lagarde reiterated, as before, that future decisions will be "made meeting by meeting and based on the data, with no pre-commitment to a particular rate path." Amid uncertainty in which upside inflation risks and downside growth risks coexist, the Bank is taking a cautious wait-and-see stance.

The "data-dependent" stance:

In just over a year, the rate raced from negative territory to above 4%, then edged gradually back down, before turning up again in June. The ECB regards 2.00% as "a neutral level that neither heats nor cools the economy," and it stepped one notch above that in response to renewed inflation. The July hold signals that policy has entered a phase of standing still at that level to assess conditions.

Inflation is gradually declining toward the target, but the stickiness of services lingers. ECB staff projections (as of June) see inflation falling to 3.0% in 2026, 2.3% in 2027 and 2.0% in 2028. The new projections due at the September meeting will be the next clue to whether cuts resume or another hike follows.

The marginal lending facility (2.65%) is the ceiling rate at which banks borrow overnight from the ECB, while the main refinancing operations rate (2.40%) sits in between. These three rates, raised by 0.25% in June, were held in July. Together they form a corridor that sets the "ceiling, middle and floor" for market rates.

The governors' rotation is weighted by economic size. The top five countries—Germany, France, Italy, Spain and the Netherlands—share 4 votes, while the other 16 countries share 11 votes, each rotating monthly. Everyone joins the discussion, and decisions are largely reached by a near-unanimous consensus.

Decisions are announced at 14:15 Central European Time, with the President's press conference beginning at 14:45. At the September 10 meeting, new staff economic projections will be published. If inflation eases further, the debate over resuming cuts could get moving; conversely, if the war reignites energy prices, the debate over an additional hike could take hold.

The main driver is higher energy costs tied to Middle East tensions (such as disruptions to oil shipping through the Strait of Hormuz). President Lagarde said "the war in the Middle East is generating inflationary pressure" and explained that the hike was "appropriate across a wide range of scenarios." But euro-area growth was sluggish at +0.1% in the first quarter, making this a hike with the economy weakening — a difficult call. Markets are wary of the risk of "stagflation," where upside in prices and downside in growth coexist.

A "data-dependent" stance:

In just over a year the rate climbed from negative to above 4%, then came gently back down — and here it has turned higher again. The ECB had viewed 2.00% as "a neutral level that neither heats nor cools the economy," but with prices re-accelerating it has stepped above that. It is a key turning point marking the end of the easing cycle.

The ECB staff's latest projections (June 2026) see inflation falling to 3.0% in 2026, 2.3% in 2027 and 2.0% in 2028. If oil prices settle, a debate over resuming rate cuts could emerge later in the year. The tug-of-war between upside in prices and downside in growth continues.

The marginal lending facility (2.65%) is the ceiling rate at which banks borrow overnight from the ECB, and the main refinancing operations rate (2.40%) sits in the middle. With this hike, all three rates were raised by 0.25%. The three form a corridor that sets the "ceiling, middle and floor" of market rates.

The governors' rotation is weighted by economic size. The top five countries — Germany, France, Italy, Spain and the Netherlands — share 4 votes, and the other 16 countries share 11 votes, each on a monthly rotation. Everyone takes part in the discussion, and most decisions are reached by something close to unanimity (consensus).

The decision is announced at 14:15 Central European Time, with the President's press conference from 14:45. If prices settle, a debate over resuming rate cuts could emerge later in the year. Conversely, if higher energy costs persist, further hikes come into view.

The dissents came from two directions. One member dissented in favor of a rate cut, while three objected to the "easing bias (cuts ahead)" language remaining in the statement. With prices re-accelerating on higher energy costs tied to Middle East tensions (the Iran war that began in late February), opinions split over "whether the door to a cut should be left open." Chair Powell, while noting that the tariff-driven boost to prices might be "one-off," maintained a stance of not rushing to cut.

"The next move" is hard to read:

The last cut was in December 2025. Since then, the picture has been a textbook case of "higher for longer." The rate cuts markets had initially expected for 2026 have been pushed back in the face of higher energy prices and tariff-driven upside to inflation.

Core CPI excluding energy is also at +2.6%, still above the 2% target. Meanwhile the labor market remains resilient, leading the Fed to conclude there is "no reason to rush a rate cut." How far high prices spread beyond energy — this is the one point the Fed is watching closely.

The March median (3.4% at year-end) implied one cut this year from the then-prevailing 3.50–3.75%. But subsequent upside in prices has eroded the market's rate-cut expectations. If the June SEP dots shift toward "zero cuts this year," the end of the easing cycle would become clear.

Because of this transparency, as many as four dissents sends a powerful message. Dissents in both directions — "one leaning toward a cut" and "three objecting to language signaling cuts" — show a committee split over the outlook for inflation. The decision is announced at 2:00 p.m. U.S. Eastern Time, with Chair Powell's press conference 30 minutes later.

The market is trying to gauge, at the June meeting and beyond, whether inflation stays high or eases on energy prices and tariffs. The June meeting will publish a new SEP (dot plot), and whether the rate-cut outlook retreats further is the biggest focus.

Just a month and a half earlier, the June meeting was unanimous (12-0). By July, that had turned into 3 members dissenting in favor of a hike. Under Chair Warsh, the statement stayed terse, holding to a tightening stance: "inflation remains elevated" relative to the 2% goal, and the Fed "will deliver price stability." Wariness over price pressures from the Middle East and energy is surfacing inside the committee as pressure to hike.

A "hold" with hawkish innards:

In just a year and a half, the rate climbed from near zero to above 5%, then came back down to 3.625% — and here it has come to a stop. The last cut was December 2025. Since then, "higher for longer" has played out to the letter. The 2026 cuts markets had originally penciled in have been forced to slip.

Meanwhile, the labor market is holding firm, with the unemployment rate at 4.3%. Prices are high but the economy isn't weak — that combination is what leads the Fed to judge there's "no reason to rush to cut." Energy prices have surged +23.5% year over year, and whether they settle down is the single biggest key ahead.

The upward tilt shown by June's dots turned into concrete action in July — 3 dissenting votes for a hike. The dots are next updated at the September meeting. If elevated inflation persists, September's SEP could show a hike as the median, raising the odds the Fed actually moves.

Trace the votes and they swing sharply: April 8-4 → June 12-0 (unanimous) → July 9-3. Having briefly closed ranks in June, the committee saw 3 members dissent for a hike in July. Behind the hold, voices arguing "we should hurry to raise" are growing louder within the committee. The three dissenters — Hammack, Kashkari, and Logan — all hold a vote this year.

Decisions are announced at 2 p.m. U.S. Eastern time, followed 30 minutes later by the Chair's press conference. September's meeting will bring a fresh SEP (dot plot). If prices stay elevated, the central question is whether the median points to a hike and whether the Fed actually goes through with one. A rising tally of dissents could be the starting gun.

What the market was watching was not the rate itself, but the statement and the dot plot (more below). The statement was sharply shortened to about 130 words (down from 341 in April), and the language signaling an "easing bias" (cuts ahead) was removed. The dot plot, moreover, saw the outlook for rate cuts this year vanish and tilted toward hikes. The debate over "is the next move a cut, or a hike?" has clearly shifted toward a hike.

An unusual moment of leadership change:

In just a year and a half, the rate climbed from near zero to above 5%, then came back down to 3.625% — where it has now come to a stop. The last cut was in December 2025. Since then, the picture has been a textbook case of "higher for longer." The rate cuts markets had initially expected for 2026 have been pushed back.

Meanwhile, the labor market remains resilient, with an unemployment rate of 4.3%. High prices but a healthy economy — this combination has led the Fed to conclude there is "no reason to rush a rate cut." Energy prices have surged +23.5% year on year, and whether they settle down is the biggest key going forward.

Chair Warsh, long skeptical of the dot plot, did not submit his own dot. At the press conference he announced the creation of five task forces to review the conduct of monetary policy, communication, data, productivity and the drivers of inflation. In response to the hawkish dots, the market grew alert to a resumption of hikes, and all three major U.S. stock indexes fell together.

The most recent April meeting split 8-to-4, with four dissents (the most since 1992). This June, by contrast, the vote was unanimous (12–0). Under new Chair Warsh, the committee has fallen into line on "reining in inflation." The statement going so far as to say it "will deliver price stability" also reflects that unity.

Decisions are announced at 2:00 p.m. U.S. Eastern Time, with the Chair's press conference 30 minutes later. The market is trying to gauge, at the July meeting and beyond, whether the effects of energy prices and tariffs ease and inflation slows, or whether prices stay high and a debate over resuming rate hikes emerges.

The backdrop is an inflation flare-up. Underlying inflation (the trimmed mean) has stayed above the top of the target range (2–3%), and higher fuel prices tied to Middle East tensions have raised the upside risks. The statement said "both headline and underlying inflation remain too high" and made clear it would not hesitate to hike further if needed. Governor Bullock said she will "do what it takes" until there is confidence inflation is returning to target.

The climax of the "round trip":

This "round trip" shows how the fight against inflation is anything but straightforward. Inflation that once came down reaccelerated on higher energy prices, undoing the cuts. The current 4.35% is the same level as the previous peak, but it differs decisively in that it was "reached again by hiking," not "maintained by holding." The market's focus has shifted to whether this becomes a new ceiling or merely a waypoint.

The RBA's inflation target is not a pinpoint "2%" like the US, Europe, or Japan, but a "range of 2–3%." As long as underlying inflation exceeds the top of this band, the RBA has no choice but to keep tightening. Curb inflation with hikes, or pause out of concern for growth — the May meeting chose the former.

The most divided was March's 5 vs 4 — the moment the committee split right down the middle over whether to rush hikes or take a cautious stance. By this May it tilted decisively toward supporting a hike at 8 vs 1. In the face of sticky inflation, the committee's view is firming up around "continued tightening." The decision comes at 2:30 pm Sydney time, with Governor Bullock holding a press conference an hour later.

Hikes usually favor a stronger Aussie dollar, helping it stay firm against the US dollar. At the same time, Australian bond yields rise, and the equity market (ASX 200) tends to find its upside capped as it dislikes higher rates. For the RBA, the challenge of squaring inflation control with supporting growth continues.

The market's focus is whether the June meeting delivers a fourth consecutive hike or shifts to a wait-and-see stance. Whether underlying inflation falls back toward the target range (2–3%) will drive the next decision. The outlook presented in the May SMP (Statement on Monetary Policy) will be the clue.

As recently as about a year ago, the RBA was in a cutting phase. Then an inflation flare-up and higher fuel prices from Middle East tensions sent it abruptly back to hiking. Governor Bullock has not softened her hawkish stance, saying she will "do what it takes." From cuts to hikes — Australia's monetary policy has gone through a "U-turn" that is rare even globally.

What a "hawkish hold" is:

This "round trip" shows how the fight against inflation is anything but straightforward. Inflation that once came down reaccelerated on higher energy prices, undoing the cuts. The current 4.35% is the same level as the previous peak, but it differs decisively in that it was "reached again by hiking," not "reached by holding."

The RBA's inflation target is not a pinpoint "2%" like the US, Europe, or Japan, but a "range of 2–3%." As long as underlying inflation exceeds the top of this band, it is hard for the RBA to move to cuts. Meanwhile the economy is on the soft side: unemployment has risen to 4.5%, and GDP grew just +0.3% on the quarter, lacking momentum. The squeeze between inflation and growth continues.

The RBA also warned that "if global economic uncertainty persists, growth in Australia and its major trading partners could come in lower." As a resource economy, Australia is heavily swayed by China's economy and commodity prices. The risk that hikes meant to curb inflation further chill the economy — this tightrope walk lies behind the decision to hold.

The March meeting split right down the middle at 5 vs 4 — the moment the committee was most divided over whether to rush hikes or take a cautious stance. It then converged on a hike 8 vs 1 in May, and held unanimously in June. The vote dynamics directly mirror the policy process of moving "from hesitation to consensus." The decision comes at 2:30 pm Sydney time, with Governor Bullock holding a press conference an hour later.

The market's focus is whether 4.35% becomes a "ceiling once more" or merely a waypoint. If underlying inflation falls back into the target range (2–3%), the hold continues; if it reaccelerates, a further hike follows. The outlook presented in the August SMP (Statement on Monetary Policy) will set the next direction.

The BOE held its rate at 3.75% — but it was "hawkish."

The BOE held at 3.75%. Hike votes rose to "2."

BoE holds at 3.75%. Hike votes rise to "3".

BOJ holds at 0.75%. Outlook Report turns hawkish.

BOJ raises its policy rate to 1.0% — a 31-year high.

BOJ holds at 1.0%. Leaves the door open to more hikes.

The ECB held its rate at 2.00%.

The ECB turned to its first hike in three years.

The ECB Holds Rates. Assessing the War's Impact.

The Fed held rates. But there were "four" dissents.

The Fed held rates for a fourth straight meeting.

The Fed holds for a 5th straight meeting. But 3 dissented for a hike.

RBA hikes for a third straight meeting. The rate is back at 4.35%.

The RBA turns from cuts. Three hikes, then a hold.

BOE (UK)

BOJ (Japan)

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Fed (US)

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Follow every monetary policy meeting of the major central banks (Fed, ECB, BOJ, BOE, RBA). After each meeting, we summarise the decision, the outlook for the next meeting, and the market impact. The latest article always appears at the top.

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