The Federal Reserve lifted the target range to 3.75%\u20134% from 3.5%\u20133.75% in its first rise in three years, with a unanimous vote. Updated dot projections show 16 of 18 policymakers looking for another move this year, while eight also see a third, final increase in 2027. From 2028 the profile turns to easing but ends at a higher neutral rate of 3.25%. The Fed characterised the step as \u201cremoving a dose of accommodation\u201d, implying policy is not yet restrictive; its forecasts keep growth above potential, unemployment below equilibrium and inflation above 2% through 2029. Market pricing and assets adjusted: front-end yields rose more than 7 bps to the highest since July 2024; money markets are split on October but lean to December, with two more rises discounted by mid-2027. The dollar firmed, pushing EUR\/USD below 1.15 to about 1.1466.<\/p>\n\n
The Bank of England decision follows new UK inflation inputs: Food and Drink Federation forecasts put food inflation near 4% by Christmas and an average 5.5% in 2027, versus the BoE\u2019s 3.5% year-end assumption, while Bloomberg estimates household energy bills may rise about 25% when Ofgem resets caps in January, a move that could lift headline inflation above 4% in 2027. UK money markets price just under 100 bps of tightening over 12 months, and the Daily Telegraph reports plans to stop active sales of 20- and 30-year gilts as annual quantitative tightening slows to \u00a350bn from \u00a370bn.<\/p>\n\n
In New Zealand, GDP rose 0.2% q\/q in Q2 2026 versus 0.1% consensus, after 0.9% in Q1; y\/y growth was 2.6%, with construction up 2.7% q\/q, transport\/post\/warehousing down 1.7% and retail\/accommodation down 1%. Consumer spending rose 0.1% q\/q, gross fixed capital formation 1.5%, exports 3.3% and imports fell 0.8%, lifting the implied odds of a 25 bps RBNZ hike in October to 65% from 50%, as NZD\/USD neared 0.57.<\/p>\n\n\n\n