Central Bank Watch: BoJ, Fed, PBoC, and BoE Policy Decisions in the Spotlight
Central banks maintain cautious stance amid global economic uncertainties. BoJ, Fed, PBoC, and BoE hold rates steady as markets await policy signals.

Zeynep Kucukkirali
3 Min Read
Mar 19, 2025
As all eyes turn to the Federal Reserve, which will announce its decision in just a few hours, several other major central banks around the world are also set to reveal their policy decisions this week.
BoJ Holds Rates Steady Amid U.S. Tariff Concerns
The first decision came from the Bank of Japan, where policymakers opted to keep the policy rate unchanged at 0.5%, signaling that they are in no rush to raise rates while expressing concerns about the potential impact of U.S. tariff policies.
Governor Kazuo Ueda, in his press conference, stated that local economic data has largely aligned with expectations, while wage growth has been slightly stronger than anticipated.
Ueda had repeatedly emphasized that rate hikes would be considered if the data remained in line with projections. His latest remarks, highlighting the importance of data, were interpreted by economists as keeping the door open for a rate hike at the next meeting.
Rate hike expectations have recently driven the Japanese yen to strengthen significantly against the U.S. dollar. As long as expectations for a BoJ rate hike remain firm, the yen is likely to maintain its momentum. However, the signals the Fed provides regarding its policy path have the potential to alter the current outlook.
Fed Set to Hold Rates as Markets Await Powell's Signals
In just a few hours, Federal Reserve officials are expected to keep interest rates steady in the 4.25%-4.5% range, with markets focusing on updated economic projections and the signals Chair Jerome Powell will provide regarding the policy outlook.
Back in December, policymakers projected two quarter-point rate cuts for 2025 and painted an optimistic picture of the economic outlook. However, since President-elect Donald Trump is set to take office early in the year, economic uncertainty has surged significantly, leading to a sharp deterioration in economic sentiment.
Initially, markets were concerned that his policies could rekindle inflation, but with recent weak economic data, doubts about the economy's resilience have grown, and recession fears have taken hold.
Traders are now pricing in two quarter-point rate cuts in the second half of the year to support the economy, whereas just days ago, expectations were for three quarter-point cuts. In this context, Powell's ability to convince markets that the economy remains resilient will be crucial.
PBoC Decision in Focus: No Change Expected, Stimulus Efforts Continue
On Tuesday, the People's Bank of China (PBoC) is set to announce its policy decision, with no changes expected. Recent data from China showed that industrial production has increased, real estate investment has declined moderately, and retail sales have risen. However, economic challenges persist amid Trump's tariffs. Meanwhile, the PBoC appears reluctant to ease policy for now, as it prioritizes maintaining the stability of the yuan.
A Deutsche Bank AG survey revealed that consumer sentiment has improved sharply compared to last year, reflecting the government's efforts to boost household confidence and spending. However, at the same time, consumers still expect the real estate sector to remain unstable.
Meanwhile, Chinese banks have lowered consumer loan rates to record-low levels as policymakers ramp up stimulus measures to stabilize growth and counter U.S. tariffs.
Additionally, the State Council announced over the weekend that further steps will be taken to support domestic consumption. Beijing may need to take more concrete steps to boost domestic consumption in order to meet its 5% growth target and minimize the impact of Trump's tariffs.
BoE Likely to Stay Cautious as Economic Risks Loom
Turning to Europe, markets will be watching the Bank of England (BoE) policy decision on Thursday, with rates expected to remain unchanged at 4.5%. Despite disappointing growth data, persistently high inflation, concerns over the new government's first budget, and rising economic and geopolitical uncertainties are likely to keep the BoE cautious about further easing.
Recent comments from some policymakers have signaled growing hesitation regarding rate cuts. A Bloomberg survey suggests that seven members of the Monetary Policy Committee will vote to keep rates steady, while only two are expected to favor a 25-basis-point cut. Meanwhile, swap traders are currently pricing in only two more quarter-point cuts for the remainder of the year.
A cautious stance from the BoE could continue to support the GBP against the USD, maintaining its resilience in the currency markets.