Finance

Central banks align on conditional guidance, split on policy

The Tip Desk · November 9, 2026 · 2 min read

A majority hold rates and all banks with guidance readings make policy conditional on economic developments, with differences in rate stance and balance-sheet policy.

The Federal Reserve (Fed), European Central Bank (ECB) and Bank of Japan (BoJ) hold rates in the November round, forming a three-of-five majority among rate-stance readings. The Fed said it maintains its federal funds target range, the ECB keeps its three key rates unchanged, and the BoJ retains its overnight call-rate setting.

All five central banks with forward-guidance readings use state-contingent guidance. The Fed said additional information will help determine the stance appropriate for returning inflation to its goal. The ECB said it follows a “data-dependent and meeting-by-meeting approach” to monetary policy. Both tie their decisions to incoming evidence without specifying a fixed policy path.

The Bank of England (BoE) said it will “continue to assess the evidence at each meeting.” The BoJ also allows for necessary adjustments to its policy rate. According to the People's Bank of China (PBoC), the intensity, pace and timing of policy implementation depend on domestic and international economic and financial conditions and financial-market developments. That shared conditionality extends across banks with different rate stances.

The BoE's rate stance is hawkish: the central bank said inflationary pressure in the pipeline is sufficient to warrant an increase in Bank Rate. The PBoC's stance is dovish, with the central bank saying it continues to implement moderately accommodative monetary policy. These are the two departures from the majority hold classification.

Balance-sheet policy has no majority across the four banks with readings. The Fed and PBoC are classified as hold. The Fed said it continues to maintain ample reserves in the banking system; according to the PBoC, policy maintains ample liquidity. The ECB and BoJ are classified as runoff. The ECB said its APP and PEPP portfolios are declining at a “measured and predictable pace.”

The BoJ pairs its rate hold with the execution of its bond-purchase reduction plan. The central bank said it has conducted Japanese government bond purchases of about 2.5 trillion yen a month under the plan decided at its June 2026 meeting.

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