G7 Central Banks Prepare for Rate Hike Wave Amid Inflation and Geopolitical Tensions

Rising inflation and geopolitical tensions are putting pressure on G7 central banks to raise interest rates. The Federal Reserve will make its decision first, on Wednesday, after last Friday's core U.S. inflation data exceeded expectations.

Bets on a Fed rate hike have intensified, with Bloomberg economists Anna Wong, Andrew Sacher, and Eliza Winger stating that the market 'wants and expects' the Federal Open Market Committee to raise rates.

The Bank of Japan is expected to follow suit on Friday, pushing its policy rate to 1.25%, the highest since 1995, while the European Central Bank has already tightened last Thursday with its second rate hike since the Iran conflict broke out.