Monetary policy needs recalibration due to domestic reasons, not the Fed

Early reports suggest softer consumer demand at the beginning of the festive season, with discounts and incentives offered by automakers and online platforms to boost sales and clear inventory

Most investors believe emerging market central banks must follow the Fed. If they don’t, interest rate differentials can lead to significant capital flows and currency fluctuations.

Indeed, the Fed’s pivot to easing in September has opened the policy floodgates. In Asia, the Bangko Sentral ng Pilipinas cut the policy rate by 25 basis points (bps), and the reserve requirement ratio (RRR) by 250 bps, Bank Indonesia surprised with a 25-bp rate cut, and the People’s Bank of China cut the RRR by 50 bps, and the seven-day open market operation reverse repo rate by 20 bps. Is