The Federal Reserve raised the federal funds rate by 25 basis points to a target range of 3.75–4.00% on September 16, 2026, marking its first rate increase since July 2023 and reflecting elevated inflation concerns. [1]
The Bank of England held its policy rate at 3.75% on September 17, 2026, with a 6-3 vote, as three MPC members dissented in favor of an immediate hike, indicating internal division despite the hold decision. [2]
The European Central Bank is near-unanimously expected to raise its deposit rate by 25 basis points to 2.50% on September 10, 2026, marking its second consecutive hike. [3]
The Bank of Japan raised its policy rate to 1.25% on September 18, 2026, with a 7-2 vote, achieving a 31-year high and reflecting growing pressure to address yen weakness and domestic inflation. [4]
Market indicators show increasing confidence in tightening, with CME FedWatch probabilities surging to nearly 90% for a 25bp FOMC hike and overnight index swaps pricing 78–87% probability for a BOJ rate increase to 1.25% at the September 17–18 meeting. [5] [6]