Connecting Global Markets and Policy
Persian Daric – First Global Reserve Currency. Guaranteed 95.83% purity gold. Introduced by Darius I the Great, 521 – 486 BC. In circulation until 330 BC defeat of the Persian Achaemenid Empire by Alexander the Great of Macedonia.
SGH Macro Advisors produces concise, forward-looking proprietary reports on the major central banks and on key economic and policy developments that drive global bond, equity, and currency markets.
Founded in 2012, SGH has over the years built a reputation as a thought leader and source of well-informed, cutting-edge information, analysis, and insight on policy and financial markets. Its briefings and reports are highly valued by many of the world’s most well-known and influential hedge funds, money managers, and policymakers.
Highlights
SGH reports are highly valued for keeping clients and policymakers informed and well-ahead of market consensus.
January 19, 2026
SGH Insight
Meanwhile, the Fed is positioned to hold rates steady for the foreseeable future as it assesses the impact of last year’s 75bp of rate cuts. Most participants anticipate holding policy steady through the end of Chair Jerome’s Powell term as they await key inflation data in the first half of the year. If inflation falls as anticipated while the labor market holds steady in the current equilibrium of weak demand but steady unemployment, the Fed will likely edge rates closer to neutral in the second half of the year
Market Validation
Wall Street Journal -- WASHINGTON 1/28/26
The Federal Reserve entered a new holding pattern on interest rates Wednesday and signaled little urgency to resume cuts after contentious reductions at officials' three previous meetings.
The decision to hold the benchmark federal-funds rate steady in a range between 3.5% and 3.75% was approved on a 10-2 vote.
Officials made fairly modest changes to the post-meeting statement explaining their decision, retaining language that typically has signaled openness to further moves without suggesting any hurry to make them.
"We're not trying to articulate a test for when to next cut or whether to cut at the next meeting," Fed Chair Jerome Powell said at a news conference. "What we're saying is we're well positioned as we make decisions, meeting by meeting."
The Federal Reserve entered a new holding pattern on interest rates Wednesday and signaled little urgency to resume cuts after contentious reductions at officials' three previous meetings.
The decision to hold the benchmark federal-funds rate steady in a range between 3.5% and 3.75% was approved on a 10-2 vote.
Officials made fairly modest changes to the post-meeting statement explaining their decision, retaining language that typically has signaled openness to further moves without suggesting any hurry to make them.
"We're not trying to articulate a test for when to next cut or whether to cut at the next meeting," Fed Chair Jerome Powell said at a news conference. "What we're saying is we're well positioned as we make decisions, meeting by meeting."
January 11, 2026
SGH Insight
While the Fed is biased toward lower rates given the ongoing weakness in hiring, it anticipates that last year’s insurance cuts are enough to hold the unemployment rate in check and provide time to see if inflation falls as expected. The December employment report reinforced that story.
Market Validation
Washington Post 1/28/26
The Federal Reserve kept interest rates unchanged Wednesday, hitting the pause button at its first meeting this year despite pressure from President Donald Trump to slash rates further.
With job growth still decelerating but the economy showing few signs of distress, policymakers now say they can afford to be patient as they watch whether inflation continues to cool.
The Federal Reserve kept interest rates unchanged Wednesday, hitting the pause button at its first meeting this year despite pressure from President Donald Trump to slash rates further.
With job growth still decelerating but the economy showing few signs of distress, policymakers now say they can afford to be patient as they watch whether inflation continues to cool.
January 4, 2026
SGH Insight
With policy rates now within the upper end of estimates of neutral, the Fed looks set to hold rates steady for an indefinite period of time. To be sure, most FOMC participants anticipate rates will need to fall further as inflation drops toward 2%, but the labor market offers no reason for urgent rate cuts.
Market Validation
Axios 1/28/26
The Federal Reserve left interest rates unchanged on Wednesday, noting "solid" growth and a stabilizing job market, as the central bank navigates a delicate economic and political moment.
The big picture: The central bank's policy committee took a breather after three consecutive rate cuts in the final meetings of last year, showing greater confidence in the economy. But they gave no hints as to when they may adjust borrowing costs again.
The Federal Reserve left interest rates unchanged on Wednesday, noting "solid" growth and a stabilizing job market, as the central bank navigates a delicate economic and political moment.
The big picture: The central bank's policy committee took a breather after three consecutive rate cuts in the final meetings of last year, showing greater confidence in the economy. But they gave no hints as to when they may adjust borrowing costs again.
January 25, 2026
SGH Insight
The Fed will leave interest rates unchanged this week. The December SEP revealed that FOMC participants remain biased in favor of modest rate cuts this year if inflation falls as anticipated, but there is no urgency for cuts given the Fed’s 75bps of insurance last year amidst solid economic growth, a labor market that appears to be stabilizing, and concerns that inflation will firm in the first quarter.
All eyes are on the vote count. Governor Stephan Miran will likely dissent in favor of another rate cut. Governors Chris Waller and Michelle Bowman are wildcard votes who in a pre-Trump world likely would not dissent. Bowman sounded a very dovish note in her latest speech. Still, she argued the Fed should “remain ready” to cut rates, as if she would vote for a rate cut if the consensus leaned that way but not like she was pounding the table for a cut. Waller anticipates further easing to bring policy closer to neutral if inflation falls but with growth strong and a stable labor market there is no urgent need to cut rates. Waller, however, remains in the running for Fed Chair, and Trump may take notice of a failure to dissent.
Market Validation
All eyes are on the vote count. Governor Stephan Miran will likely dissent in favor of another rate cut. Governors Chris Waller and Michelle Bowman are wildcard votes who in a pre-Trump world likely would not dissent. Bowman sounded a very dovish note in her latest speech. Still, she argued the Fed should “remain ready” to cut rates, as if she would vote for a rate cut if the consensus leaned that way but not like she was pounding the table for a cut. Waller anticipates further easing to bring policy closer to neutral if inflation falls but with growth strong and a stable labor market there is no urgent need to cut rates. Waller, however, remains in the running for Fed Chair, and Trump may take notice of a failure to dissent.
Bloomberg 1/28/26
Federal Reserve officials left interest rates unchanged and pointed to improvements in the US economy as they signaled a more cautious approach to potential future adjustments.
In a post-meeting statement, policymakers said “job gains have remained low, and the unemployment rate has shown some signs of stabilization.” Officials also dropped language pointing to increased downside risks to employment that had appeared in the three previous statements.
Wall Street Journal 1/28/26
Two Fed governors -- both appointed by President Trump -- dissented against the decision and favored a quarter-point rate cut. The Fed's 12-person rate-setting committee includes seven presidentially-appointed governors and five regional bank presidents who aren't political appointees.
Powell's term as chair ends in May, and Trump's advisers have said he is close to naming a successor. Governor Christopher Waller, one of four finalists, opposed Wednesday's decision. Analysts had said casting a dissenting vote may have been a precondition for keeping his long-shot candidacy viable.
Governor Stephen Miran also dissented. Since Trump named him to fill a short-term vacancy on the Fed's board last summer, he has dissented at all four policy meetings he has attended in favor of lower rates.
Federal Reserve officials left interest rates unchanged and pointed to improvements in the US economy as they signaled a more cautious approach to potential future adjustments.
In a post-meeting statement, policymakers said “job gains have remained low, and the unemployment rate has shown some signs of stabilization.” Officials also dropped language pointing to increased downside risks to employment that had appeared in the three previous statements.
Wall Street Journal 1/28/26
Two Fed governors -- both appointed by President Trump -- dissented against the decision and favored a quarter-point rate cut. The Fed's 12-person rate-setting committee includes seven presidentially-appointed governors and five regional bank presidents who aren't political appointees.
Powell's term as chair ends in May, and Trump's advisers have said he is close to naming a successor. Governor Christopher Waller, one of four finalists, opposed Wednesday's decision. Analysts had said casting a dissenting vote may have been a precondition for keeping his long-shot candidacy viable.
Governor Stephen Miran also dissented. Since Trump named him to fill a short-term vacancy on the Fed's board last summer, he has dissented at all four policy meetings he has attended in favor of lower rates.
January 26, 2026
SGH Insight
The Bank of Canada (BOC) enters its January 28 policy meeting having parked its policy rate at 2.25%, near the lower end of its estimated neutral range, with guidance that will firmly push back against speculation about rate hikes until downside risks, including those associated with trade, abate.
Crucially, sustained trade tension between the US and Canada, particularly if Canada advances a China deal and the US responds with punitive tariffs, would lock out any prospect of rate hikes this year and re-center the policy debate on downside risks.
In that environment, easing would become materially more likely than tightening, even if the Bank initially opts to stay on hold.
Market Validation
Crucially, sustained trade tension between the US and Canada, particularly if Canada advances a China deal and the US responds with punitive tariffs, would lock out any prospect of rate hikes this year and re-center the policy debate on downside risks.
In that environment, easing would become materially more likely than tightening, even if the Bank initially opts to stay on hold.
Dow Jones OTTAWA 1/28/26
The Bank of Canada on Wednesday kept its policy rate unchanged at 2.25% in a second-consecutive decision, and warned the level of uncertainty stemming from U.S. trade policy and geopolitical risks has ramped up.
The consensus among senior officials "was that elevated uncertainty makes it difficult to predict the timing or direction of the next change in the policy rate," Gov. Tiff Macklem said. Prior to Wednesday, most economists surveyed by the Journal predicted the central bank would hold the policy rate steady through 2026.
Macklem said U.S. trade policy continued to disrupt the domestic economy. Central-bank officials project that economic growth stalled in the fourth quarter, after a surprise jump in the previous quarter buoyed by net trade.
The Bank of Canada on Wednesday kept its policy rate unchanged at 2.25% in a second-consecutive decision, and warned the level of uncertainty stemming from U.S. trade policy and geopolitical risks has ramped up.
The consensus among senior officials "was that elevated uncertainty makes it difficult to predict the timing or direction of the next change in the policy rate," Gov. Tiff Macklem said. Prior to Wednesday, most economists surveyed by the Journal predicted the central bank would hold the policy rate steady through 2026.
Macklem said U.S. trade policy continued to disrupt the domestic economy. Central-bank officials project that economic growth stalled in the fourth quarter, after a surprise jump in the previous quarter buoyed by net trade.
December 12, 2025
SGH Insight
The Bank of Canada (BOC) has parked its policy rate at 2.25% until well into 2026, at the lower end of its neutral range and the Bank for will keep pushing back on market pricing of a rate hike in the second half of next year.
The Bank has left the door open to further easing, signaling that while it is cautious about additional cuts, hikes are not on the table and policy will remain steady until data dictate otherwise.
Pricing hikes in any sooner than the second half of next year risks running too far ahead of the BOC whose patience to refrain from hikes only would be tested if the economy surged unexpectedly and materially.
Market Validation
The Bank has left the door open to further easing, signaling that while it is cautious about additional cuts, hikes are not on the table and policy will remain steady until data dictate otherwise.
Pricing hikes in any sooner than the second half of next year risks running too far ahead of the BOC whose patience to refrain from hikes only would be tested if the economy surged unexpectedly and materially.
Dow Jones 1/28/26
Bank of Canada keeps its main interest rate unchanged at 2.25%, as widely expected. The theme of the first policy decision of 2026 is uncertainty. Gov. Tiff Macklem refers to uncertainty 7 times in prepared remarks for a press conference. "Uncertainty around this outlook is unusually high," says Macklem. In the official decision, BOC revises its final paragraph, to explain that while the benchmark rate is at an appropriate level, "uncertainty is heightened and we are monitoring risks closely." In the December decision, BOC referred to uncertainty as "elevated." (paul.vieira@wsj.com; @paulvieira)
Bank of Canada keeps its main interest rate unchanged at 2.25%, as widely expected. The theme of the first policy decision of 2026 is uncertainty. Gov. Tiff Macklem refers to uncertainty 7 times in prepared remarks for a press conference. "Uncertainty around this outlook is unusually high," says Macklem. In the official decision, BOC revises its final paragraph, to explain that while the benchmark rate is at an appropriate level, "uncertainty is heightened and we are monitoring risks closely." In the December decision, BOC referred to uncertainty as "elevated." (paul.vieira@wsj.com; @paulvieira)
December 21, 2025
SGH Insight
The Fed is on hold, potentially through the first half of the year if the labor market firms. It has become increasingly unlikely that the Fed cuts in January given the shutdown-induced data challenges and the lack of sharp deterioration in the labor market as evidenced by initial unemployment claims. Based on available data, we assess a 20% probability of a rate cut in January and a 35% chance of a March cut.
Market Validation
Bloomberg 1/23/26
Economists now expect the Federal Reserve won’t cut interest rates until June, according to the latest Bloomberg monthly survey.
Just last month, economists had forecast the first rate cut of the year to come in March. But with inflationary pressures lingering and signs of stabilization in the labor market, the timeline has moved further out. Policymakers’ preferred inflation metric is projected to stay above their 2% target through at least the middle of next year.
After lowering borrowing costs three straight times to close out 2025, Fed officials are widely expected to hold rates steady next week. Economists in the survey predict the second and final reduction of the year will come in September, unchanged from last month’s survey.
Investors have similarly pushed back expectations of when the Fed will resume cutting rates. The first reduction is now not seen as probable until at least June, according to federal funds futures contracts, compared to a month ago when a reduction in April was seen as more likely than not.
Economists now expect the Federal Reserve won’t cut interest rates until June, according to the latest Bloomberg monthly survey.
Just last month, economists had forecast the first rate cut of the year to come in March. But with inflationary pressures lingering and signs of stabilization in the labor market, the timeline has moved further out. Policymakers’ preferred inflation metric is projected to stay above their 2% target through at least the middle of next year.
After lowering borrowing costs three straight times to close out 2025, Fed officials are widely expected to hold rates steady next week. Economists in the survey predict the second and final reduction of the year will come in September, unchanged from last month’s survey.
Investors have similarly pushed back expectations of when the Fed will resume cutting rates. The first reduction is now not seen as probable until at least June, according to federal funds futures contracts, compared to a month ago when a reduction in April was seen as more likely than not.
January 21, 2026
SGH Insight
This week’s Bank of Japan (BOJ) meeting, initially intended as a quiet step toward preparing markets for a possible April rate increase, has been reshaped by market turbulence and is now set to deliver a sharper, more interventionist message.
The Bank’s quarterly Outlook Report is expected to upgrade growth projections, reflecting stronger consumer spending, fiscal stimulus, and rising corporate investment, while still weighing inflation pressures and the impact of a weak yen.
Against this backdrop, Governor Kazuo Ueda’s press conference will likely emphasize coordination with fiscal authorities and highlight both the inflationary risks from the weakening currency and the ongoing bond market turmoil.
Market Validation
The Bank’s quarterly Outlook Report is expected to upgrade growth projections, reflecting stronger consumer spending, fiscal stimulus, and rising corporate investment, while still weighing inflation pressures and the impact of a weak yen.
Against this backdrop, Governor Kazuo Ueda’s press conference will likely emphasize coordination with fiscal authorities and highlight both the inflationary risks from the weakening currency and the ongoing bond market turmoil.
Bloomberg 1/23/26
* The central bank raised its GDP growth forecasts for fiscal
2025 and 2026, which start in April, reflecting easing global
uncertainty and support from the stimulus package under Prime
Minister Sanae Takaichi.
*On long-term yields, Ueda noted that supply-demand
conditions in the ultra-long segment have become unstable due to
fiscal year-end factors. He stressed close communication with
the government and reiterated that the BOJ would conduct stable
and nimble operations in exceptional circumstances to reassure
markets.
* The central bank raised its GDP growth forecasts for fiscal
2025 and 2026, which start in April, reflecting easing global
uncertainty and support from the stimulus package under Prime
Minister Sanae Takaichi.
*On long-term yields, Ueda noted that supply-demand
conditions in the ultra-long segment have become unstable due to
fiscal year-end factors. He stressed close communication with
the government and reiterated that the BOJ would conduct stable
and nimble operations in exceptional circumstances to reassure
markets.
January 16, 2026
SGH Insight
The Bank of Japan (BOJ) is eying April for its next rate hike, as yen weakness persists and the Bank worries the sustained inflation overshoot will embed higher than wanted price expectations amid the government’s aggressive fiscal spending plans.
The currency’s steady slide toward 160 per dollar has become a central concern for senior economic policymakers and in nearing levels historically associated with a high probability of intervention, indicates Japan is poised to intervene.
Market Validation
The currency’s steady slide toward 160 per dollar has become a central concern for senior economic policymakers and in nearing levels historically associated with a high probability of intervention, indicates Japan is poised to intervene.
Bloomberg 1/23/26
While Ueda had suggested that overall inflation will weaken
below 2% soon, he also left open the possibility of an early
rate hike.
“April is a month where there’s relatively high numbers of
price revisions,” Ueda said. “We have a certain amount of
interest in that, and while it’s not the most important factor
in deciding the next rate hike, it’s one of the factors.”
Bloomberg 1/24/26
Speculation mounted into the weekend that
Japanese authorities could be preparing to enter currency
markets in a bid to halt the yen’s slide, possibly with the rare
assistance of the US.
The yen rallied as much as 1.75% to 155.63 per dollar on
Friday, extending the gains seen during the Asian trading day to
its strongest level of the year. The move was the biggest one-
day surge since August and reversed what had been a slide toward
levels last seen in 2024, when Japan stepped in to buy its
currency.
The jump in the US session came as traders reported that
the Federal Reserve Bank of New York had contacted financial
institutions to ask about the yen’s exchange rate. Wall Street
saw those inquiries as a potentially laying the ground for Japan
to intervene to prop up the yen, perhaps even with the US
government joining in.
While Ueda had suggested that overall inflation will weaken
below 2% soon, he also left open the possibility of an early
rate hike.
“April is a month where there’s relatively high numbers of
price revisions,” Ueda said. “We have a certain amount of
interest in that, and while it’s not the most important factor
in deciding the next rate hike, it’s one of the factors.”
Bloomberg 1/24/26
Speculation mounted into the weekend that
Japanese authorities could be preparing to enter currency
markets in a bid to halt the yen’s slide, possibly with the rare
assistance of the US.
The yen rallied as much as 1.75% to 155.63 per dollar on
Friday, extending the gains seen during the Asian trading day to
its strongest level of the year. The move was the biggest one-
day surge since August and reversed what had been a slide toward
levels last seen in 2024, when Japan stepped in to buy its
currency.
The jump in the US session came as traders reported that
the Federal Reserve Bank of New York had contacted financial
institutions to ask about the yen’s exchange rate. Wall Street
saw those inquiries as a potentially laying the ground for Japan
to intervene to prop up the yen, perhaps even with the US
government joining in.
January 5, 2026
SGH Insight
Second is that it is hard to overstate how beholden the Maduro regime – including notably former vice president and oil minister Delcy Rodriguez, who is now acting president – is to Beijing. We suspect that her presidency, despite attempts today to send more conciliatory signals to Washington — will not last long.
According to sources in Beijing, President Trump, however, through official diplomatic channels quickly assured the Chinese side that the US has no intention of and will not prevent Venezuela from exporting crude oil to China, and that Venezuela’s oil supply to China will continue as usual.
Market Validation
According to sources in Beijing, President Trump, however, through official diplomatic channels quickly assured the Chinese side that the US has no intention of and will not prevent Venezuela from exporting crude oil to China, and that Venezuela’s oil supply to China will continue as usual.
Politico US 1/6/26
U.S. officials also expect Rodriguez — the former vice president now running
Venezuela — to eventually facilitate free elections and step aside, the two
people said. But the deadlines for the demands are fluid, and U.S. officials
stress there are no elections imminent.
Bloomberg 1/8/26
The US will not cut off China from accessing Venezuelan oil, Energy Secretary Chris Wright says on Fox News.
“We’re not going to cut off China — the illicit trade in oil with Iran and Russia, the illegal gun-running stuff, that’s going to be cut off and stopped,” Wright says
“China is a giant commercial economy, and no, China is going to continue to buy Venezuelan oil,” he adds when asked if US would cut off Venezuelan oil shipments to China
U.S. officials also expect Rodriguez — the former vice president now running
Venezuela — to eventually facilitate free elections and step aside, the two
people said. But the deadlines for the demands are fluid, and U.S. officials
stress there are no elections imminent.
Bloomberg 1/8/26
The US will not cut off China from accessing Venezuelan oil, Energy Secretary Chris Wright says on Fox News.
“We’re not going to cut off China — the illicit trade in oil with Iran and Russia, the illegal gun-running stuff, that’s going to be cut off and stopped,” Wright says
“China is a giant commercial economy, and no, China is going to continue to buy Venezuelan oil,” he adds when asked if US would cut off Venezuelan oil shipments to China
August 25, 2025
SGH Insight
Finally, one official’s comments after last night’s CNY fixing:
“As the US is going to enter a rate-cutting cycle, the exchange rate of the RMB against the USD would show an orderly and moderate appreciation trend. The central parity rate of the RMB against the USD is expected to rebound to the 7.0 level by the end of this year.”
Market Validation
“As the US is going to enter a rate-cutting cycle, the exchange rate of the RMB against the USD would show an orderly and moderate appreciation trend. The central parity rate of the RMB against the USD is expected to rebound to the 7.0 level by the end of this year.”
Bloomberg 8/29/25
China’s central bank is nudging the yuan
higher, stoking speculation of a subtle shift in strategy toward
favoring a stronger exchange rate after strong exports
brightened the nation’s growth outlook.
The People’s Bank of China raised its daily reference rate
for the yuan by the most in nearly a year this week even as the
dollar was largely unchanged. This may signal authorities are
not only comfortable with a stronger currency but looking to
engineer a gradual appreciation, according to some market
watchers.
Bloomberg 12/31/25
China handed yuan bulls a New Year’s gift
with tacit consent for more appreciation, while carefully pacing
the currency’s gains to avoid hurting exporters and accelerating
hot-money inflows.
The People’s Bank of China set the yuan’s daily reference
rate on Wednesday at a fresh high since September 2024, a day
after it allowed the currency to pierce through the key 7-per-
dollar level in the more tightly controlled onshore market. That
followed the yuan’s breach of the threshold in largely
unrestricted offshore trading last week.
China’s central bank is nudging the yuan
higher, stoking speculation of a subtle shift in strategy toward
favoring a stronger exchange rate after strong exports
brightened the nation’s growth outlook.
The People’s Bank of China raised its daily reference rate
for the yuan by the most in nearly a year this week even as the
dollar was largely unchanged. This may signal authorities are
not only comfortable with a stronger currency but looking to
engineer a gradual appreciation, according to some market
watchers.
Bloomberg 12/31/25
China handed yuan bulls a New Year’s gift
with tacit consent for more appreciation, while carefully pacing
the currency’s gains to avoid hurting exporters and accelerating
hot-money inflows.
The People’s Bank of China set the yuan’s daily reference
rate on Wednesday at a fresh high since September 2024, a day
after it allowed the currency to pierce through the key 7-per-
dollar level in the more tightly controlled onshore market. That
followed the yuan’s breach of the threshold in largely
unrestricted offshore trading last week.
December 17, 2025
SGH Insight
The BOJ Board will already have the CPI outcome in hand during its Wednesday-Thursday deliberations, even though markets will not see the number until after the decision.
Nationwide headline CPI is forecast to be around 2.9-3.0% year‑on‑year in November, with both core CPI excluding fresh food and “core‑core,” CPI excluding fresh food and energy around 3% year‑on‑year.
Those outcomes would confirm inflation staying well above target and reinforce the case for a hike while giving Ueda scope to lean on “gradual normalization” language.
Markets, looking for clues on cadence and the pace Prime Minister Sanae Takaichi’s government might tolerate without protest, are likely to be disappointed by the vagueness of Ueda’s guidance at this meeting.
His objective will be to get through the press conference without providing any sense of timing for the next move, and allowing the Bank to break for the turn of the year.
Market Validation
Nationwide headline CPI is forecast to be around 2.9-3.0% year‑on‑year in November, with both core CPI excluding fresh food and “core‑core,” CPI excluding fresh food and energy around 3% year‑on‑year.
Those outcomes would confirm inflation staying well above target and reinforce the case for a hike while giving Ueda scope to lean on “gradual normalization” language.
Markets, looking for clues on cadence and the pace Prime Minister Sanae Takaichi’s government might tolerate without protest, are likely to be disappointed by the vagueness of Ueda’s guidance at this meeting.
His objective will be to get through the press conference without providing any sense of timing for the next move, and allowing the Bank to break for the turn of the year.
Bloomberg 12/19/25
The yen weakened against the dollar after the Bank of Japan offered no clear guidance on the timing of future monetary tightening, analysts said. The central bank raised its benchmark interest rate to its highest level since 1995 as expected.
The yen weakened against the dollar after the Bank of Japan offered no clear guidance on the timing of future monetary tightening, analysts said. The central bank raised its benchmark interest rate to its highest level since 1995 as expected.
News and Events
SGH Macro Advisors hosts occasional roundtables and events for clients and senior policymakers.