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• The Pound Sterling falters as BoE’s Mann argues against the gradual and cautionary monetary policy easing approach.
• The US Dollar weakens as investors expect Trump’s policies could slow down the US growth momentum.
• Fed’s Powell reiterated the central bank needs more clarity before adjusting the monetary policy.

The Pound Sterling (GBP) underperforms its peers at the start of the week as Bank of England (BoE) Monetary Policy Committee (MPC) member Catherine Mann rebutted the need for a “gradual and cautious” monetary policy easing approach, as guided by a majority of BoE officials in the February monetary policy meeting and testimony before Parliament’s treasury committee on Wednesday, due to deepening economic volatility across the globe in her speech on Thursday.

Mann argued against the moderate monetary expansion approach amid significant volatility in global markets. She also said that the founding premise for a gradualist approach to monetary policy is “no longer valid” due to “substantial volatility” coming from financial markets, especially from “cross-border spillovers”.

A day before Mann’s speech, four BoE officials, including Governor Andrew Bailey, endorsed a gradual path for “removing monetary policy restrictiveness” as the inflation persistence is less likely to fade “on its own accord”.

It is worth noting that Catherine Mann was one of two BoE officials who voted for a larger-than-usual rate cut of 50 basis points (bps) in the interest rate decision in February.

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