The US dollar advanced after the Federal Reserve delivered its first rate rise since 2023 in a unanimous decision, citing elevated inflation, upside risks and resilient demand. Officials lifted their 2026 GDP and inflation forecasts, and the dot plot pointed to another hike by end-year; while the 2027 median implied no further increases, eight members backed an additional move next year and one argued two may be warranted. Markets priced a 50% chance of an October follow-up and fully discounted a December rise, while for 2027 two quarter-point hikes are close to fully priced. Next week brings speeches from Austan Goolsbee on Monday, with Philip Jefferson and John Williams on Tuesday, plus Wednesday’s S&P flash PMIs and Friday’s Atlanta Fed GDPNow update for Q3.
European Central Bank and Bank of England Policy Updates
In Europe, Wednesday’s Eurozone and UK flash PMIs follow policy calls in which the ECB raised rates by 25bps on 10 September and the BoE held rates in a 6-3 vote, with three favouring a 25bps increase; Eurozone markets indicate three more quarter-point hikes by end-2026. The SNB decides Thursday, with August CPI at 0.8% year-on-year within its 0–2% range and policy expected to stay at 0.0%, while a 25bps March hike is already fully priced. Australia’s jobs report and a Thursday Trump–Xi meeting, covering trade, tariffs, rare earths and AI, also sit on the radar.
