Central Banks May Hike Rates Faster Than Expected: JPMorgan

According to JPMorgan's global economists, major global central banks may be forced to hike rates at a faster and larger magnitude than markets currently anticipate.

The Federal Reserve, European Central Bank, Bank of Japan, and Reserve Bank of Australia are expected to act in succession within the month, with eight out of nine developed-market central banks tracked expected to hike by the end of 2026.

The bank's economists believe the balanced Taylor rule points to roughly 100 basis points of additional tightening in developed-market policy rates, but risks are clearly skewed toward 'faster and larger.'

Market pricing may severely underestimate the magnitude of tightening, with current developed-market rate curves pricing in roughly 100 basis points of modest tightening.