ECB, Fed and BOJ could all raise rates this week

The European Central Bank is set to announce its rate decision on Thursday, September 10, opening a week in which all three of the world's most influential central banks could raise borrowing costs. The Federal Reserve meets September 15–16 and the Bank of Japan on September 18, setting the stage for a rare convergence of potential rate hikes across major economies.

ECB Expected to Hike as Eurozone Inflation Climbs

Markets have priced in a 25-basis-point increase to the ECB's deposit rate with near-certainty, according to Polymarket data showing the probability at roughly 99.65%. Eurozone inflation accelerated to 3.3% in August, up from 2.9% in July, driven largely by surging energy prices, with the TTF gas benchmark hitting a three-year high. ECB President Christine Lagarde's post-decision press conference, scheduled for 2:45 p.m. CET, will be closely watched for signals about the path beyond September.interactivecrypto+2

The EUR/USD pair has remained flat at around 1.1622, reflecting what analysts describe as a stalemate between hawkish signals from both the ECB and the Fed. German 10-year Bund yields have climbed to 3.38%, nearing levels not seen in 15 years.interactivecrypto

Fed and BOJ Decisions Loom

The Fed will announce its decision on September 16 with the federal funds rate currently at 3.50%–3.75%. Futures markets now price in roughly a 60% chance of a quarter-point hike, a shift from earlier in the year when a hold was the consensus. The strong August nonfarm payrolls report — 162,000 jobs added versus a consensus estimate of 56,000 — bolstered the case for tightening. UBS ↘ 0.56% Global Wealth Management now projects two Fed rate hikes in September and December.advertorial.cryptonews+2

In Japan, the BOJ is widely expected to raise its policy rate to 1.25% from 1.0% at its September 18 meeting. Reuters reported that Takuji Aida, an economic adviser to Prime Minister Sanae Takaichi, projected the hike and suggested quarterly increases through January. Citi Citigroup Inc. ↘ 0.71% Research noted that investors will focus on whether two Policy Board members aligned with Takaichi's reflationary agenda dissent from the decision — a unanimous vote could signal that the government is yielding to U.S. pressure for monetary normalization.investing+2

Yen and Dollar Dynamics Hinge on Fed

Near-term yen movements remain heavily dependent on the Fed's decision, according to Citi analysts. A surprise Fed rate hike could push the dollar back toward 155 yen, while ongoing downward momentum might temporarily bring it toward 152 yen. Even if the Fed holds, a positive stock market response could limit yen appreciation and keep the dollar-yen pair above 150. The USDJPY pair fell roughly 1% in the days leading up to this week, dropping from 156.25 to 154.75 between September 4 and September 7.investing+1

In the longer run, Citi projects the gradual narrowing of U.S.-Japan interest rate differentials will spur a broader unwinding of yen carry trades.investing