The Federal Reserve, Bank of Japan and ECB are all likely to leave policy rates unchanged this week, with each expected to maintain a cautious pace of rate hikes. Markets will be watching developments through year-end.
Ahead of the U.S. FOMC meeting, the focus is on whether the delay in additional rate hikes will continue. The Federal Reserve is not expected to rush further tightening this year, and the pace of rate hikes is likely to be monitored cautiously.
The European Central Bank (ECB) is also scheduled to announce its policy decision on the 28th and 29th, and is seen as potentially issuing its own signal suggesting a December rate hike. The Bank of Japan is also expected to leave rates unchanged at its meeting on the 29th and 30th, while reportedly maintaining an open stance on the possibility of a December rate hike.
Ana Wong of BE expects policy rates to remain unchanged through year-end. Given developments in AI-related markets and the impact of borrowing costs, attention is also being drawn to the risk of financial conditions tightening sharply.