Super Central Bank Week Is Here: Multiple Central Banks to Announce Latest Interest Rate Decisions

This week, the world ushers in a "super central bank week." The Federal Reserve will announce its interest rate decision on the 16th, U.S. Eastern Time, while the Bank of England and the Bank of Japan will also release their monetary policy decisions on the 17th and 18th local time, respectively. Against the backdrop of an unexpectedly strong rebound in employment coupled with stubborn inflation, market expectations for a Fed rate hike in September have risen markedly. As of the 13th, CME's "FedWatch" tool showed that the market was pricing in a probability of more than 87% that the Fed would raise rates by 25 basis points this month. However, Hassett, director of the U.S. National Economic Council, said on the 13th that U.S. President Trump and he himself believed there was no reason to raise rates at present, and that maintaining policy stability before the midterm elections was more important. The Bank of England will announce its rate decision on the 17th local time. Data showed that UK GDP grew 0.4% month-on-month in July, performing better than market expectations. Analysts generally expect this meeting to keep the benchmark interest rate unchanged. However, as energy costs may still pass through to consumer prices, some traders have begun betting on a 25-basis-point rate hike by the Bank of England in November. The Bank of Japan will hold a monetary policy meeting from the 17th to the 18th. Kyodo News previously reported that the Bank of Japan is considering raising its policy rate by 25 basis points to 1.25%. If implemented, this would become Japan's highest policy rate in about 31 years, and also mark another move after three months since the June rate hike. The main factors driving rate hike expectations include the depreciation of the yen, among others.