Central Banks' Rate Pause Leaves Wealth Managers Divided on Upcoming Hikes

Wealth managers weigh in on central banks' rate pause decisions, citing varying expectations for upcoming rate hikes. The Bank of Japan (BoJ) kept interest rates at 1.00% after its meeting on Friday, with Japanese Governor Ueda's hawkish tone and upgraded inflation projections suggesting imminent rate hikes. David Kohl, chief economist at Swiss private bank Julius Baer, predicts interest rate hikes in October 2026 and March 2027.

Kazumasa Ishii and Daiju Aoki of UBS Global Wealth Management maintain their forecast for rate hikes in December 2026 and June 2027. Patrick Ho, chief investment officer at HSBC Private Bank and Premier Wealth, sees a potential 25 basis points rate hike in December, taking the policy rate to 1.25% by year-end.

Regarding the European Central Bank (ECB), Dr. Karsten Junius expects another rate hike from the ECB in September, even if oil prices fall to pre-war levels again. David Kohl highlights that eurozone GDP for the second quarter of 2026 exceeded expectations, but July inflation accelerated to 2.9% year-on-year, driven by climbing energy costs and persistent services price inflation.