Central Banks Meet Amid U.S. Shutdown, Uncertainty Over Interest Rates

Several major central banks, including the Federal Reserve, European Central Bank, and Bank of Japan, will hold interest rate meetings this week. This comes amid a US government shutdown that has resulted in reduced data releases from the country. On Thursday at 02:00 UTC+8, the Federal Reserve is expected to announce its interest rate decision followed by a monetary policy press conference with Fed Chair Jerome Powell at 02:30 UTC+8. Dallas Fed President Logan’s speeches are also scheduled for Friday, with one at 01:15 and another at 21:30 UTC+8. Powell is predicted to announce a 25 basis point rate cut but may not make significant policy changes until inflation and the labor market become clearer. Given recent trade tensions and the ongoing government shutdown, many expect a slightly dovish tone from the Fed. However, even those expecting a dovish approach like Waller are hesitant to commit to multiple cuts in advance, so the market’s expectations for a 100 basis point rate cut after October could face disappointment if the Fed’s message suggests otherwise.