- The market expects 25 basis point interest rate hikes from the Federal Reserve and the European Central Bank. Economists are closely examining their communications for insights into their future rate paths.
- The Bank of Japan is likely to maintain its -0.1% short-term interest rate target despite consistently exceeding its inflation target and signs of economic heating. All three central banks—the Fed, Bank of Japan, and European Central Bank—are set to announce their key interest rate decisions this week.
Why it matters
Each central bank faces unique challenges: The Federal Reserve, after pausing its rate hikes, aims to bring inflation down to its 2% target while observing the U.S. economy; the outcomes of rate decisions could have significant implications for global monetary policies and financial markets.
