The US Federal Reserve, along with the European Central Bank and the Bank of Japan, is expected to maintain current interest rates in the upcoming week, opting for a cautious approach before potential future hikes. The Fed, which last raised rates in September 2023, signaled another increase might occur in 2026. Despite recent hot inflation data, officials appear in no hurry to act, with economists and investors anticipating a move at the December meeting.
Fed Chairman Kevin Warsh will face a challenging press conference, balancing market expectations without providing explicit guidance. Meanwhile, the European Central Bank and the Bank of Japan are also likely to keep rates steady, with the ECB’s decision overshadowed by France’s bond-market troubles.
Other central banks, such as those in New Zealand and Canada, may take action. New Zealand is widely expected to hike rates on Wednesday, while several economists predict the first rate increase in three years from the Bank of Canada the same day. Additionally, US and eurozone growth data, the UK Budget, and rate decisions from Colombia to Thailand will be key highlights.
The US government will release its initial estimate of third-quarter GDP on Thursday, with the Atlanta Fed’s GDPNow model forecasting a 3.5 percent annualized growth rate, the strongest in a year. The report may also show that underlying demand registered the strongest back-to-back quarters of growth in five years.