Global Rate Hike Fever Spreads Across G7 Central Banks

Central banks from much of the Group of Seven are facing a pivotal week as inflation risks mount, prompting them to consider raising interest rates. This week's decisions will likely recast the global monetary policy landscape for the rest of 2026 and beyond.

The US Federal Reserve is expected to raise its benchmark rate on Wednesday, following core inflation reading that exceeded expectations. The decision comes despite President Donald Trump's wishes, with investors betting that Fed Chairman Kevin Warsh and his colleagues will defy him. This would mark the first interest rate hike in three years for the US.

The Bank of England is also under scrutiny, although a rate increase on Thursday is not anticipated. However, with price risks simmering, the prospect of shifting toward a hike as soon as November cannot be excluded.