Central banks are tilting hawkish as the Middle East energy shock feeds into inflation, though the picture is far from uniform.
Published research this week highlights the ECB holding its deposit rate at 2.5% on 29 October, with President Lagarde confirming a hike was debated and the direction is clear absent major surprises — meeting by meeting, data dependent. Commentary flagged a speech by Banca d'Italia Governor Panetta, who leans openly hawkish and argued further hikes may be needed as euro-area inflation has doubled since February to 3.8%, almost entirely on energy.
Researchers also note Norway hiked 25bp to 2.5% with more possibly to come, while the Bank of Japan held at 1.25% on an 8-1 vote and signaled continued tightening as underlying inflation nears 2%. The Fed held at a 4.0% upper bound (10-2), and one camp of analysts points to a firmly hawkish FOMC voter who sees at least two more 25bp hikes before any pause. A contrarian emerging-market thread stands out: Kazakhstan cut 50bp, while Ukraine hiked to 16.5% with inflation at 10%.
By the numbers:
• Policy rates: Fed 3.75–4.00%, ECB 2.50%, BoE 3.75%, BoJ 1.25%.
• Next decisions: BoE 5 Nov 2026 (27 of 30 research houses expect a hike).
Charts: finchiefs.com/data/policy-rates