Japan raised its benchmark rate to 1.25%, the highest in 31 years, and the currency remains under pressure while long yields break records.
Fed & Monetary Policy
72 storiesThe Federal Reserve raised rates this month and officials have since said another increase this year is a reasonable expectation.
After a quarter-point hike in September, governors and reserve bank presidents said more tightening is likely, and betting markets moved October odds close to 70%.
The Bank of England governor said there is no question the economy is seeing the direct effects of the energy shock, which markets read as clearing the way for a November rise.
Two regional Fed presidents and a governor pointed to more tightening, and prediction markets now put an October increase above even odds.
The Cleveland Fed president told a New York audience that long-term Treasury yields are being driven by growth, debt and the expected rate path, and put the real inflation risk elsewhere.
Officials from New York, Philadelphia, Cleveland and the Board of Governors all argued this week that inflation still requires higher rates.
Isabel Schnabel resigned from the European Central Bank's executive board to become the International Monetary Fund's financial counsellor, opening a seat and a succession fight.
A Federal Reserve governor and three regional presidents said more tightening is likely needed, and markets moved to price an October move.
The 10-year note pushed above 5.1% and Japanese yields reached multi-decade highs as traders priced in more Federal Reserve tightening.
A sitting Federal Reserve governor told an audience in Chicago that his base case calls for more tightening, and futures markets moved.
A quarter-point increase to 1.25 per cent came with two dissenting votes and no explicit hawkish guidance, leaving the currency close to its weakest levels of the year.
A run of hawkish remarks from regional Federal Reserve presidents has pushed traders to price further tightening, lifting the dollar to its strongest level since late July.
Three regional Federal Reserve presidents argued this week that price pressures now extend well beyond energy, and that one rate increase may not be enough.
St. Louis, Chicago and Minneapolis policymakers all argued on the same day that inflation is still too high to stop tightening.
Policymakers in Chicago, St. Louis, Minneapolis and Boston all argued that last week's quarter-point increase will not be the end of the tightening.
Japan's central bank lifted its policy rate to the highest level since 1995 on a split vote, days after the Federal Reserve and the European Central Bank tightened.
Europe's central bank opened a link between its payment system and blockchain-based markets, and said it will put a small portion of its own funds into tokenised securities.
The Federal Reserve, the European Central Bank and the Bank of Japan all raised rates inside eight days, and a Fed policymaker says price pressure now runs well beyond energy.
The Minneapolis Fed president said price pressure has spread well beyond the oil shock, days after the Federal Reserve raised rates again.
A quarter-point increase took Japan's policy rate to its highest level since 1995, but cautious guidance sent the currency down rather than up.
The last big central bank anchored near zero has joined the tightening cycle, and the yen weakened anyway.
Barclays and UBS expect a hike as soon as November; ING is sticking with a hold, and markets price an 80% chance of a move.
Rates stayed at 3.75% for a sixth meeting in a row, but the overhaul of quantitative tightening was the decision that moved gilt yields.
The BOJ raised its benchmark rate to 1.25% in a 7-2 vote and signalled more increases, but the two dissents were enough to send the currency lower.
The Federal Reserve lifted its target range to between 3.75% and 4% in a unanimous vote, its first increase in three years.
Britain kept rates on hold in a split vote while rewriting the plan that governs how much long-dated debt it sells back to the market.
The Federal Reserve's first increase in three years was unanimous, and the new chairman hinted it may not be the last.
A sixth consecutive hold, paired with a warning that rates are likely to rise if high energy prices persist.
Tokyo is expected to move to 1.25 per cent on Friday, a day after a hawkish Fed pushed the yen past the 156 level.
A unanimous quarter-point increase takes the target range to 3.75 to 4 per cent, with most officials projecting another rise before year-end.
The Fed chairman raised rates over the president's stated wishes, and every voter on the committee went with him.
The front end of the curve repriced immediately while the long end barely moved, and the dollar firmed against the euro.
The Federal Open Market Committee raised its target range by a quarter point and its new projections point to one more increase before the year is out.
A quarter-point move on Friday would take Japanese borrowing costs to their highest level in 31 years.
Markets are pricing a quarter-point increase that would put the new Fed chair at odds with the White House.
The central bank will make no reserve-management purchases for a second straight month, citing ample reserves, while continuing reinvestment operations.
A quarter-point move on Friday would take the policy rate to its highest level in three decades, with the yen rally and the long end of the global bond market both hanging on the decision.
Markets have all but priced a quarter-point increase on Wednesday, a decision that would put the new Fed chair at odds with the president who chose him.
Markets go into the September policy meeting expecting the first increase in the federal funds rate in three years, and the first under chair Kevin Warsh.
The Bank of Japan, the Bank of England and the European Central Bank all face markets that have moved their expectations toward higher rates as energy prices climb.
Surging oil is pulling the Bank towards tightening while record borrowing costs push it to ease off quantitative tightening.
A quarter-point move on Friday is fully priced, leaving the yen and the ten-year government bond to carry whatever surprise remains.
Markets are pricing an increase at this week's meeting, the first of Kevin Warsh's tenure, while the president calls publicly for the lowest rates anywhere.
Rate-setters meet on Thursday after a bond sell-off that has already pushed UK borrowing costs sharply higher.
Futures positioning flipped bullish on the yen for the first time since February, days before a Bank of Japan meeting markets expect to deliver another increase.
Futures markets have all but settled the Wednesday decision; the open question is how many increases follow, and Chair Kevin Warsh has said little to guide the answer.
The European Central Bank president signalled that energy-driven inflation is not fading quickly, days after the bank raised rates for the second time since the Iran war began.
Futures pricing points to the first US rate increase since 2023, and former officials warn that the Fed rarely stops at one.
Markets have rapidly repriced the odds that Japan's central bank tightens again, days after the Federal Reserve's own decision.
Consumer prices rose at an annual rate of 3.4% in August, and futures markets now put the odds of a Federal Reserve rate hike next week at 90%.
The European Central Bank delivered its second quarter-point increase of the year, taking the deposit rate to 2.5% as oil above $100 a barrel feeds euro-area inflation.
August wholesale inflation matched forecasts but accelerated from July, and rate-hike odds firmed ahead of Friday's consumer price report.
Ten-year gilts reached their highest level since 2007 and 30-year yields their highest since 1998, days before a meeting at which no change is expected.
Pablo Hernandez de Cos told central bankers that the financing behind the AI build-out, not the technology itself, is what threatens financial stability.
Economists surveyed by Reuters expect a hike on 18 September and a faster path to 1.75%, with the yen already at a seven-month high.
The Treasury secretary's pressure campaign has pushed the dollar toward a seven-month low against the yen and revived talk of a carry-trade unwind.
Officials are openly split, and forecasters say the decision could hinge on a few hundredths of a percentage point in the next two days of data.
A quarter-point increase on Thursday is priced at near certainty, with Brent closing on $100 a barrel.
September meeting odds moved above 50% as Kevin Warsh's first big decision approaches with inflation still above target.
A second increase this year is fully priced, and the guidance that follows will decide how European bonds and the euro trade from here.
The governor told MPs there is no secret plan for unconditional increases, on the same day a gilt auction cleared at a record yield.
The currency reached its strongest level in months on hawkish policy bets, and the carry trade that funded global risk positions is unwinding with it.
Traders are pricing an increase at next week's meeting after a stronger-than-expected August payrolls report, with Fed officials publicly split.
A rally in the Japanese yen ahead of an expected Bank of Japan rate increase is upending the largest carry-trade build-up in three decades.
A payroll print of 162,000 has revived rate-hike expectations, even as the Fed's own officials pull in different directions ahead of the August CPI report.
Japan's currency reached its strongest level in seven months on Monday, driven by expectations of faster tightening and by open pressure from Washington on the yen's valuation.
Markets price a 75% chance the Bank of Japan raises rates on 18 September, and the yen has recovered to its strongest level since late February.
Markets fully price a quarter-point increase from the European Central Bank this week, with futures already leaning toward another move by December.
August employment came in at 162,000 against a forecast of 56,000, sharpening a debate inside the Federal Reserve that a hot CPI print later this week could settle.
A second increase would take the deposit rate to 2.50 per cent and confirm the euro area as the most hawkish of the major central banks.
Traders are pricing better than even odds of a US rate rise on 15 to 16 September while the Fed's own officials disagree in public.