Global Central Banks Unite Against Inflation

Central bankers around the world are adopting a more hawkish stance on inflation, with a series of rate hikes expected in the coming weeks. The Federal Open Market Committee meets this week, and futures markets predict a quarter-percent rate hike from Chairman Kevin Warsh and his Fed governors with over 90% certainty.

The European Central Bank has already hiked its benchmark rate for a second time in the current cycle to an 18-month high, and the Bank of Japan is expected to follow suit with another rate hike. The Bank of England may be the outlier, holding rates steady this week but possibly hiking later in the year.

Economists Jennifer Lee at BMO Capital Markets and Joe Brusuelas at RSM agree that there's a regime change underway for the international economy, marking the end of low inflation and low interest rates. Central bankers are now tackling inflation risks with higher interest rates.