Fed, ECB and Bank of Japan Expected to Hold Rates Steady This Week While Hike Bets Build for December

The Federal Reserve and its counterparts in the euro zone and Japan are likely to leave interest rates unchanged this week, choosing to wait before any further increases. The Fed raised rates in September for the first time since 2023 and signaled another hike was probable this year. US inflation data has come in hot since then, yet officials appear in no hurry, and markets expect the next move at the final meeting of 2026 in December. Three days of decisions begin Wednesday in Washington, with policymakers weighing risks that range from surging energy prices to the AI boom.

Warsh Faces a Tricky Press Conference

Fed Chairman Kevin Warsh has avoided giving guidance on future moves, so his post meeting briefing will be a delicate test. He probably will not say much about December, but he may also avoid shifting market bets away from the expected hike.

ECB, Bank of Japan, Bank of Canada and New Zealand Rate Decisions

The European Central Bank meets Thursday and could hint at a December hike, though France’s bond market troubles will overshadow the decision. The Bank of Japan is likely to hold on Friday while keeping the door open to a move at the end of the year. Other central banks may act. Most forecasters expect New Zealand to raise rates on Wednesday, and several economists see the Bank of Canada making its first hike in three years that same day. Also on the calendar are US and euro zone growth data, the UK budget, and rate decisions from Colombia to Thailand.