A week ago, the Federal Reserve’s September interest-rate announcement was expected to be a relatively straightforward affair, with most analysts and market pricing pointing to no change.

However, last week’s inflation data turned those expectations on their head. The Fed’s rate-setting committee is now expected to tighten policy, lifting the federal funds target range by 25 basis points to 3.75–4.00%.

“We think it’s a closer call than the market is pricing,” said JPMorgan’s Michael Feroli. “But at the end of the day, the Chair’s repeated stern warnings on inflation intolerance risk institutional credibility absent some action to back it up.”

Leading economists and central-bank watchers changed their forecasts following stronger-than-expected inflation data published last week by the Bureau of Labor Statistics. (LS – Continue Reading)

The Bank of Japan is likely to raise rates to 1.25% at the end of its two-day meeting on Friday amid inflationary pressures, according to a CNBC survey.

A hike would signal an acceleration of the tightening cycle, faster than the six-month interval the Bank has been following since it started policy normalization in March 2024. The BOJ last raised rates in June.

Around 89% of respondents said they expect the BOJ to hike by 25 basis points, citing higher inflation, higher wages, and pressure from the US government. (CNBC – Continue Reading)

Japan’s export growth slowed a tad in August while remaining at an elevated pace, with shipments of semiconductors and chips manufacturing equipment surging.

The value of exports rose 19.3% from a year earlier, slowing from a 23.2% gain in July, the Finance Ministry reported Wednesday. The result compared with economists’ median forecast of an 18.4% increase. (BBG – Continue Reading)