Central banks are tilting hawkish as the Middle East energy shock keeps inflation risks skewed higher.
Sweden's Riksbank raised its policy rate 25bp to 2%, effective 11 November, and signaled more hikes may follow if inflation and activity track forecasts. It expects CPIF above 2% next year on supply costs and a weaker krona, and flagged unresolved Middle East disruptions as an upside risk.
Elsewhere, published commentary from policymakers echoes the hawkish lean. Bank of Canada Governor Tiff Macklem said further hikes may be needed, proceeding carefully given tariff and energy uncertainty. Banca d'Italia's Fabio Panetta said more tightening could prove necessary with inflation above target for an extended period. One camp of analysts flagged an FOMC voter arguing for at least two more 25bp hikes before any pause. Australia's central bank hiked 25bp to 4.85%.
Not everyone is tightening. The published research consensus notes a 50bp cut in one emerging market to 15.75%, while China's central bank trimmed its share-buyback lending rate to 1% and pledged to meet banks' lending needs in full.
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 (29 of 32 research houses expect a hike).
Charts: finchiefs.com/data/policy-rates