Global Interest Rate Divergence Ahead of September

The direction of global interest rates is diverging ahead of September, with the US Federal Reserve expected to hold rates steady while the European Central Bank and Bank of Japan are predicted to raise theirs.

This divergence comes amid energy price pressures and geopolitical risks in the Middle East. Markets had initially priced in rate cuts, but the recent energy shock has shifted expectations.

The Fed is seen as likely to keep its benchmark rate on hold, with a 63% chance of no change in September. However, expectations for a hike by year-end remain strong.