Fed Rate Hike Looms as Global Central Banks Shift to Tightening

Citi economists now expect the Federal Reserve to raise the federal funds rate this week. According to them, any increase is more likely to be described as a calibration than as the opening move of a new hiking cycle.

The change in tone is not limited to Washington. More major central banks are raising rates than cutting them for the first time in years. The European Central Bank has already begun tightening, and Citi has added two further hikes to its ECB forecast.

Citi also revised its Bank of England outlook, now looking for two additional increases. The Bank of Japan is projected to deliver four rate rises in total.