The Week Ahead - Crunch time for the Fed and the BOJ

Global central bank policy remains in flux as persistent inflation and geopolitical instability drive aggressive monetary tightening. In the United States, elevated August CPI data necessitates a 25 basis point Federal Reserve rate hike, with further increases anticipated in December. European markets face similar pressures, as the ECB raised rates by 25 basis points and projects additional hikes through early next year to counter energy-induced inflation. Meanwhile, the Bank of Japan prepares for a 25 basis point hike, with market attention focused on Governor Ueda’s future policy stance. Across Asia, China’s growth remains subdued, while India faces rising inflation and New Zealand struggles with modest growth following oil price shocks. Throughout these regions, the ongoing conflict in the Middle East continues to fuel energy price volatility, complicating the inflation outlook and forcing central banks to prioritize price stability over economic expansion.