Monetary policy fragmentation has become the dominant market theme as major central banks pursue starkly different inflation fight strategies.
Policy Matrix:
| Central Bank | Current Rate | Next Move | Market Impact |
|---|---|---|---|
| Fed | 5.50% | Hold → Cut Sep | USD weakness |
| ECB | 4.25% | Cut June → Pause | EUR volatility |
| BOJ | 0.10% | Hike July | JPY surge |
Cross-Asset Implications:
- Currency Wars: EUR/JPY at 15-year lows
- Yield Spreads: U.S.-Germany 10Y gap widens to 180bps
- Equity Valuation: S&P premium to Euro Stoxx hits record
