United States
Markets head into the Federal Reserve's meeting next week anticipating more than a 50% chance of a rate hike, meaning there's scope for a surprise.
Recent economic data, including last week's strong jobs numbers and comments from Fed officials, moved the needle in favour of a more hawkish policy outlook.
Fed Chair Kevin Warsh said he would avoid "forward guidance", which he argued ties the hands of policymakers and sets public expectations that may need to be changed.
New Zealand
The Reserve Bank of New Zealand hiked rates for the second consecutive meeting to 2.75% earlier this month, as expected. But it also hinted that more tightening would likely be measured as risks to the economic outlook grow.
Markets are pricing in a high chance of another hike by year-end.
Euro zone
The European Central Bank raised rates for the second time this year on Thursday and struck a hawkish tone as energy prices rise.
Markets price in at least one further hike by year-end and a deposit rate above 3% in 2027. But some economists expect the energy shock to weigh on economic growth and help curb inflationary pressures into next year.
Canada
The Bank of Canada left rates on hold last week, but Governor Tiff Macklem said it could raise rates multiple times if inflation remained elevated.
That marked a departure from his previous messaging that upside risks to inflation and downside risks to growth were broadly balanced.
Since then, signs of a cooling labour market have emerged and trade tensions with the United States cloud the economic outlook. Still markets price in another hike by year-end.
TLT•
