Central banks expected to hold rates steady

Oil-driven inflation fears may push central banks to tighten policy, but that is unlikely to deter the AI investment boom driving much of today’s growth, analysts said.

The US Federal Reserve, the Bank of Japan, and the Bank of England are all expected to hold interest rates steady this week, though each could leave the door open to future hikes if inflationary pressures stemming from the Iran conflict persist:

Traders priced in an 82% likelihood of a rate increase at the Fed’s September meeting. But Bridgewater analysts noted that higher interest rates “are unlikely to disrupt companies’ and governments’ desire to spend on AI.”