Chairman of the US Federal Reserve Jerome Powell, from left, Governor of the Bank of Canada Tiff Macklem, and Governor of the Bank of England Andrew Bailey.
(Bloomberg) — The first US interest rate cut since President Donald Trump took office for a second term is likely to seize the spotlight in a week that will determine policy settings for half of the world’s 10 most-traded currencies.
Most Read from Bloomberg
Starting with the Bank of Canada and then the Federal Reserve on Wednesday, shifting to the Bank of England the following day, and ending with the Bank of Japan, central banks may either adjust borrowing costs, prime investors for their intentions in year’s final quarter, or both.
By the end of the week, rates affecting two-fifths of the global economy, including four of the Group of Seven industrialized nations, will have been tweaked or reaffirmed. A US rate cut long sought by Trump’s White House is expected to feature prominently.
The standoff over Fed policy, pitting Trump’s strident calls for lower borrowing costs against Chair Jerome Powell’s concerns about tariff-driven inflation, hangs over the meeting. Recent signs of weakening in the labor market have, however, given a green light for what most economists expect will be a quarter-point rate cut.
What Bloomberg Economics Says:
“We expect the FOMC to cut rates by 25 basis points. That won’t be because economic data on both sides of Fed’s mandate – price stability and full employment – warrant it. Rather, the markets expect a rate cut, the White House wants it — and we think Powell is doing what he sees as needed to fend off further threats to the Fed’s independence.”
—Anna Wong, Stuart Paul, Eliza Winger, Estelle Ou and Chris G. Collins, economists. For full analysis, click here
Policymakers in Canada and Norway are expected to move rates by the same amount, while other advanced-economy counterparts may be more circumspect.
The BOE will probably keep rates unchanged after a cut in August that featured a rare three-way split among officials. The BOJ, meanwhile, remains on a path toward tightening but hasn’t signaled that such a step is imminent.
Central banks in other major economies are expected to maintain a watchful stance but not change rates. That’s the outcome forecast by economists for Indonesia, Brazil and South Africa.
Elsewhere, several economic reports in China, inflation data from Japan to the UK to Israel, Swiss export figures and a credit ratings review of Italy may be among the highlights.
Click here for what happened in the past week, and below is our wrap of what’s coming up in the global economy.
US and Canada
Before the Fed makes its decision on rates, they’ll get one last look at the American consumer. Retail sales on Tuesday are forecast to have risen 0.3% in August after much larger gains in the prior two months.
With the labor market on shaky ground and prices rising, it’s unclear how long shoppers will keep cracking open their wallets.
Economists will also keep an eye on jobless claims on Thursday to see if the jump in the prior week was a harbinger of a sustained deterioration in the labor market, or more of a one-off.
Further north, inflation in Canada is expected to tick up to 2% on a yearly basis, while the central bank’s preferred core measures are likely to hold steady at about 3%, according to the median estimate in a Bloomberg survey of economists.
The reading is unlikely to derail the Bank of Canada from cutting its benchmark overnight rate to 2.5% on Wednesday, given recent dismal jobs data and an economic contraction in the second quarter.
Canada’s easing cycle has so far failed to revive the tepid real estate market, and data on existing home sales and housing starts will offer the latest snapshot of activity.
Asia
Asia’s week features three central bank decisions, capped by the BOJ on Friday.
China kicks off the week with a deluge of August data on Monday — retail sales, industrial output, investment figures and the jobless rate — offering a read on whether targeted support is shoring up demand after a broad-based slowdown in July.
Property metrics will show how deeply the housing slump is running. Also on Monday, data will show India’s trade deficit likely shrank in August, while Pakistan’s central bank is poised to hold rates again.
Wednesday brings Japan’s trade balance and Singapore’s non-oil shipments, a bellwether for global electronics.
Bank Indonesia meets the same day, with the decision unfolding against a backdrop of protests and the abrupt departure of Finance Minister Sri Mulyani Indrawati. Policymakers are expected to hold after back-to-back cuts.
Thursday sees New Zealand GDP and Australia’s jobs report, both critical for their respective central banks’ outlooks.
Friday belongs to Tokyo, with Japan’s CPI release followed by the BOJ’s policy decision, where it’s expected to leave rates unchanged. Investors will be parsing whether Governor Kazuo Ueda signals the potential for hikes ahead as growth holds firm and inflation runs hot.
Elsewhere, New Zealand publishes trade data, Malaysia issues both trade and current-account balances, Hong Kong updates its balance of payments, and China reports FX settlement flows.
Europe, Middle East, Africa
UK inflation data will be released on the eve of the BOE decision. The headline rate is seen staying at 3.8%, masking a slight weakening in the services gauge. The central bank has predicted a peak of 4% in September.
Economists unanimously predict the BOE will keep its key rate on hold at 4%, albeit with a split vote likely again as a minority of policymakers seek an immediate cut.
The bigger focus on Thursday is set to be action on winding down the BOE’s crisis-era bond holdings. Given recent market turmoil, officials are likely to significantly slow down so-called quantitative tightening from the current pace of £100 billion ($135 billion) a year.
The rate decision in Norway the same day is likely to be trickier than usual. Most economists anticipate a close call on whether Norges Bank officials stick to their June guidance and deliver another quarter-point cut in the key rate, to 4%.
Alternatively, they could postpone a reduction after recent data showed core inflation stuck above 3% while corporate sentiment indicated steady improvement.
At the European Central Bank, a two-day conference starting Wednesday may be the biggest venue for comments from policymakers after they kept their rate unchanged in the past week. President Christine Lagarde will attend a meeting of euro-zone finance ministers later in the week.
Among data releases, trade numbers on Monday, industrial production the following day, and a final reading of inflation on Wednesday are the highlights. Germany’s ZEW investor confidence gauge will be released on Tuesday.
Friday sees credit assessments from some key euro-area borrowers. Among those on the calendar are Italy from Fitch Ratings, Greece from Moody’s Ratings, and France from Morningstar DBRS.
Swiss export numbers scheduled for Thursday may take on added significance at a time when officials are desperately trying to secure a trade deal to lessen the highest US tariffs on any advanced economy.
In Israel on Monday, annual inflation in August is seen easing to below the ceiling of the central bank’s 1% to 3% target range for the first time in 14 months. That could persuade the monetary authority to reduce rates at its next meeting on Sept. 29.
A number of monetary decisions are scheduled around Africa:
On Tuesday, Angola’s central bank may cut its key rate — currently at 19.5% — to support the economy, as inflation is expected to continue cooling.
A day later, Ghana is expected to reduce its benchmark to 23% from 25% as inflation continues to soften. Governor Johnson Asiama said in July that officials would likely lower the rate further should disinflation continue.
In South Africa on Thursday, policymakers are poised to leave their rate at 7% to curb inflation, which is expected to quicken to 3.6% in August from 3.5% the month before. The central bank said in July that it now prefers inflation to settle at the floor of its 3% to 6% target range.
Eswatini, whose currency is pegged to South Africa’s rand, will probably match the Reserve Bank’s move.
Latin America
GDP-proxy data on Monday in Brazil should show activity grinding lower as the region’s No. 1 economy heads into the second half of 2025.
Brazil watchers on Tuesday will be keen to dig into the delayed July unemployment report. The country’s tight labor market notwithstanding, analysts see the jobless rate hitting a record low 5.7%.
Among Andean economies, analysts are expecting to see some rebound in demand reflected in Colombia’s retail sales, manufacturing, industrial production and July GDP-proxy data. Peru also reports monthly output figures, with the economy running below potential and below policymakers’ expectations as well.
Banco Central do Brasil on Wednesday is all but certain to keep its borrowing costs at a 19-year high of 15% for a second straight meeting.
Consumer prices and inflation expectations have begun to cool and growth is slowing, but most analysts don’t see any policy easing until 2026.
In Argentina, President Javier Milei is facing an uphill fight to keep his economic program on track after a poor showing in Buenos Aires provincial balloting.
Analysts have been marking down their 2025 growth forecasts ahead of April-June output data due this week, which may come in flat from the prior quarter. Reports on trade, budget balance and second-quarter unemployment are also on tap.
–With assistance from Andrew Atkinson, Beril Akman, Laura Dhillon Kane, Mark Evans, Monique Vanek, Ott Ummelas, Reade Pickert, Robert Jameson and Swati Pandey.
Most Read from Bloomberg Businessweek
©2025 Bloomberg L.P.