Central banks are tilting hawkish as the energy shock threatens to seep into wages and broader prices, with several hikes landing in recent days.
The direction of travel, according to published policy summaries, is more tightening. The UK hiked 25bp to 4.0% on an 8-1 vote, warning policy isn't pre-set. Australia moved 25bp to 4.85% on a 6-3 split. Canada, under Governor Tiff Macklem, lifted to 2.5% and signalled more may be needed, cautiously. Sweden's Riksbank went to 2.0% and flagged another rise ahead. Norway's Ida Wolden Bache held at 4.5% but said rates will stay high. ECB President Christine Lagarde said a December hike isn't certain but the direction is as expected.
Japan is the outlier: minutes show the policy rate on hold to assess past tightening, though several members argued for moving toward neutral — judged well above 1%.
Researchers are split on oil. One camp argues pass-through has strengthened and demands a firmer response. A contrarian view holds that anchored expectations let central banks tolerate a temporary overshoot.
By the numbers:
• Policy rates: Fed 3.75–4.00%, ECB 2.50%, BoE 3.75%, BoJ 1.25%.
Charts: finchiefs.com/data/policy-rates