Markets are bracing for another volatile stretch as central banks and inflation data dominate the agenda. With traders dissecting fresh signals on growth, inflation, and policy outlooks, this week’s macro calendar is packed with events that could drive sharp moves across equities, currencies, and commodities.
From Washington to London to Tokyo, monetary policymakers are in the spotlight. Here are the three most significant events investors should keep on their radar:
1. US FOMC Rate Decision – Sep 17
The Federal Reserve’s decision is undoubtedly the main event. The Fed has kept rates elevated to combat sticky inflation, but markets are increasingly betting on a pivot toward cuts later this year.
All eyes will be on Chair Jerome Powell’s press conference for guidance:
Key questions: Will the Fed acknowledge progress on inflation? How worried is it about slowing growth?
Market impact: Any hint of a dovish shift could send the dollar lower, boost equities, and reignite demand for risk assets. Conversely, a hawkish tone would strengthen the greenback and pressure global markets.
Given the Fed’s outsized influence on global capital flows, expect heightened volatility across currencies, bonds, and commodities immediately after the announcement.
2. UK Bank Rate Decision – Sep 18
The Bank of England faces a complex challenge: inflation remains above target, yet growth momentum is fading. With the UK economy teetering on the edge of stagnation, policymakers must decide whether to stay the course or open the door to easing.
Key focus: The vote split within the Monetary Policy Committee (MPC) will provide valuable clues about the path forward.
Market impact: Sterling has been under pressure, and a dovish signal could weigh further on GBP while boosting UK gilt yields volatility. On the other hand, a surprise hawkish tilt could provide short-term relief for the pound.
Traders will closely monitor how the BoE frames inflation risks versus recession concerns, as this could set the tone for GBP trading into Q4.
3. BoJ Rate Decision – Sep 19
The Bank of Japan continues to stand apart from its global peers with ultra-loose monetary policy. However, pressure is mounting as the yen weakens and inflation remains stubbornly above target.
What’s at stake: Speculation is building over whether the BoJ could adjust its yield curve control (YCC) or hint at tightening in the near future.
Market impact: A surprise move could spark sharp yen appreciation, ripple through global bond markets, and trigger capital reallocation out of Japanese assets. Even without an immediate change, the tone of Governor Ueda’s guidance will be closely scrutinized.
Given Japan’s role as a major source of global liquidity, the BoJ’s decisions carry far-reaching consequences for global risk sentiment.
