Rate Hike Fears Rise as US Fed and Japan's BOJ Meet
The global financial markets are bracing for a 'Rate Super Week' as the US Federal Reserve and Japan's Bank of Japan make key monetary policy decisions. The Fed's Federal Open Market Committee meeting on the 15th and 16th will determine whether to adjust its benchmark rate, currently at 3.5% to 3.75%, in response to concerns over a prolonged Middle East war and surging international oil prices.
A rate hike is seen as possible, despite the Fed holding rates steady for five consecutive meetings since January. Even if rates remain unchanged, a hawkish stance is expected, making the dot plot, economic projections, and Fed Chair Kevin Warsh's press conference key points to watch.
Meanwhile, the Bank of Japan is widely expected to hike its interest rate at its meeting on the 17th and 18th, following pressure from US Treasury Secretary Scott Bessent. A BOJ hike would come three months after a 0.25 percentage point increase in June, potentially bringing yen carry trades back into focus.